- He said risk allocation between different stablecoins is key.
- CZ said even USDT and BUSD have their downside.
- He added that he has not seen any audit reports on Tether.
On July 31, the CEO of cryptocurrency exchange Binance, Changpeng Zhao (CZ), participated in an AMA session. During the conversation, he expressed his desire to introduce additional algorithmic stablecoins to the market in order to provide investors with alternatives that are different from the ones that already exist.
In addition, CZ noted the risks associated with large stablecoins such as USDT and BUSD. He expressed caution about Tether because of its lack of transparency.
“Personally, I haven’t seen any audit reports on USDT, and most people I’ve talked to haven’t had the opportunity to do so either. So it’s kind of a black box because we just don’t know … We should just work with as many stable coins as possible,” Zhao added.
By the way, Tether recently released a certification report that says it had net income of $850 million and total excess reserves of $3.3 billion.
CZ said the Binance exchange is working on implementing algorithmic stable coins. The company is also looking to diversify its partnerships with stablecoin issuing companies to spread out potential risk.
“We have a small team that is working on algorithmic stable coins in different regions that may not have a lot of scale, but are very relevant locally in those places,” the Binance CEO emphasized.
Reminder, activity in the BUSD sector fell to a two-year low in May amid regulatory pressures.