The CEO of Binance, Changpeng Zhao, recently tweeted that a lot of fiat money is sitting on the sidelines as a result of stablecoins’ growing dominance.
Zhao claims that if crypto investors wanted to exit the market, they shouldn’t own stablecoins.
Three stablecoins are currently included in the top 10 on CoinMarketCap, the most prominent currency ranking website owned by Binance: Tether’s USDT, Circle’s USDC, and Binance’s own Binance USD. Their market value as a group exceeds $138 billion.
Prior to the contentious project’s implosion in May, which led to a significant sell-off in the crypto market, Terra’s algorithmic TerraUSD (UST) stablecoin briefly ranked among the top 10 cryptocurrencies earlier this year. Stablecoins are currently the subject of intense regulatory attention due to Terra’s collapse.
US Treasury Secretary Janet Yellen pleaded with Congress to approve a law outlining stablecoin regulation and oversight. After reaching President Joe Biden, the legislation, whose passage was postponed by the House earlier this week, might pass before the end of the year.
The International Monetary Fund recently raised the possibility of additional stablecoin failures, raising anxiety about the issue. The biggest stablecoin issuer, Tether, recently made an effort to clear up the situation by asserting that it doesn’t own any Chinese commercial paper.
Zhao recently told CNBC that the business is really healthier now than it was at the pinnacle of the bull market, despite the fact that crypto values have drastically dropped from their peak in early November.