Binance, the world’s largest cryptocurrency exchange, is considering launching a stablecoin that is Non-Dollar Stablecoin . This comes after U.S. regulators effectively canceled Binance’s BUSD stablecoin, leading the exchange to look beyond dollar-based stablecoins.
According to Patrick Hillmann, Binance’s chief strategy officer, several private and public entities have shown interest in collaborating with the exchange on launching another stablecoin. Hillmann mentioned that there are very interesting opportunities, particularly in Europe and the Middle East, but did not provide more details.
However, experts have noted that the pivot to non-dollar stablecoins may prove difficult and that such a stablecoin might not find significant adoption. The largest non-dollar fiat-backed stablecoin currently is Euro Tether (EURT), which has a market capitalization of $220 million. In comparison, Tether (USDT), which is dollar-pegged, has a market cap of over $70 billion.
One reason why non-USD stablecoins have taken so long to become prevalent is regulation. Stablecoin issuers are looking for ways to get properly regulated without making assumptions and spending large amounts of money on lawyers to provide opinions. Despite the challenges, the recent hostile attitude of U.S. regulators creates an opportunity for non-USD stablecoins, according to Kevin Zhang, co-founder of DFX Finance, a decentralized finance protocol for non-U.S. dollar stablecoins.
Binance has been facing difficulties in the U.S. on several fronts. Last month, the exchange’s banking partner, Signature Bank, raised transaction minimums for dollar transfers, announcing that it would only process trades by users with USD bank accounts over $100,000. The exchange also temporarily suspended U.S. dollar withdrawals and deposits for international customers earlier this month.
In addition, US authorities sent subpoenas to American hedge funds and market-making companies dealing with Binance, asking for records of their communications with the exchange.
Last week, the New York Department of Financial Services (DFS) ordered Paxos, a crypto firm that issues Binance’s stablecoin BUSD, to stop minting BUSD. Subsequently, it was revealed that the SEC plans to sue the company over its BUSD issuance. The agency argued that BUSD is considered an unregistered security.
Binance’s recent troubles with U.S. regulators have led to the exchange losing a foothold in the U.S. market. Binance’s pivot to non-dollar stablecoins may be an attempt to expand its offerings and regain lost ground. However, the road ahead may prove challenging due to regulatory hurdles and the current dominance of dollar-pegged stablecoins in the market.
In conclusion, Binance is considering launching a non-dollar stablecoin after U.S. regulators effectively canceled its BUSD stablecoin. While the pivot may be an attempt to expand its offerings and regain lost ground in the U.S. market, experts have noted that such a stablecoin may face significant adoption challenges.