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In a statement on Twitter spaces, Zhao said the industry cold start reducing its reliance on US dollar based stablecoins.
When asked about the crypto industry using gold instead of the US dollar as a standard of value, Zhao said it "makes sense" but "most people's costs are still in fiat."
Instead, Zhao pointed towards alternatives to the US dollar after the US government recently gave the cold shoulder to stablecions.
“I think given the current pressure and current stances taken by the regulators on the US Dollar based stablecoins, I think that as you said the industry will probably move away to non US dollar based stablecoins[...]as a result of this we probably will see more euro based or other Japanese yen, Singapore dollar based stablecoins, so it's actually prompted us to look for more options in different places,” Zhao said.
He also warned that algorithmic stablecoins are "inherently going to have risks" compared to fiat backed stablecoins.
Zhao's comments come just days after Paxos was ordered by New York Department of Financial Services (NYDFS) to stop issuing BUSD due to "unresolved issues" relating to its relationship with Binance.
"DFS has ordered Paxos to cease minting Paxos-issued BUSD as a result of several unresolved issues related to Paxos’ oversight of its relationship with Binance in regard to Paxos-issued BUSD," NYDFS stated.
Singapore's Stablecoin Potential
As Singapore contends to be a leading Asian crypto hub (who isn't), the crypto industry turning to the Little Red Dot's stablecoin could be good news.
StraitsX is one Singapore-based firm that has issued its own Singapore dollar stablecoin, XSGD. In response to Zhao's comments, Aymeric Salley, Co-creator and Head of StraitsX, said reliance on US dollar stablecoins has been faning.
"Increasing support for non-USD stablecoins by crypto exchanges follows a trend of de-dollarisation that we’ve been witnessing across industries in the past few months, whereby USD will remain the reserve currency for the foreseeable future, but with less dominance than in the past," Salley said to Blockhead.
"We obviously welcome such positive developments as we believe that it drives more inclusion and participation globally."
However, in PwC’s Global Crypto Regulation Report 2023, it was highlighted that Singapore lacks stablecoin regulation despite its otherwise tight regulatory stance on crypto.
Singapore has legislation solidly in place for regulatory framework, AML/CTF and the travel rule but was given a “regulatory process not initiated” for stablecoins, earning it 3/4 regulatory passes.