Binance CEO Changpeng Zhao said in a recent tweet that the growing dominance of stablecoins means large amounts of fiat money on the side. cryptocurrency He stated that it means he is waiting for the market.
The Strength of Stablecoins Means They Will Return to the Cryptocurrency Market
According to Zhao, bitcoin and if crypto investors wanted to exit crypto, they wouldn’t hold stablecoins:
“3 out of the top 10 are stablecoins, so there is a huge amount of “fiat money” waiting on the sidelines and ready to come back.
If people wanted to exit crypto, most stablecoins would not hold.”
3 of the top 10 are stable coins, meaning there is a lot of “fiat” sitting sidelines, ready to get back in.
If people wanted to get out of crypto, most won’t hold stablecoins. https://t.co/QONyq1894U
— CZ 🔶 Binance (@cz_binance) July 31, 2022
According to data provided by CoinMarketCap, the most popular coin ranking site owned by Binance, there are currently three stablecoins in the top 10: Tether’s USDT, Circle’s USDC, and Binance’s own Binance USD. Their combined market value is over $138 billion.
Earlier this year, Terra’s algorithmic stablecoin TerraUSD (UST) was also briefly among the top 10 cryptoassets. After that, the project collapsed in May, causing a huge sell-off in the crypto market.
Terra’s collapse has brought stablecoins under tight regulatory scrutiny. US Treasury Secretary Janet Yellen has urged Congress to pass a bill that provides for regulation and oversight for stablecoins.
The legislation, the passage of which was delayed by the House earlier this week, could become law by the end of the year after it reaches President Joe Biden’s desk.
The International Monetary Fund (IMF) recently sounded the alarm about stablecoins and claimed that more could fail in the near future.
However, Tether, the world’s largest stablecoin company, briefly tried to provide more clarity by announcing that it does not own Chinese commercial bonds.
*Not investment advice.