After the stablecoin pressures from the USA, stablecoin diversity has come to the fore so that the crypto industry does not experience a Terra USD (UST) crisis again.
For over a year, the negative mood over the crypto industry has not passed. The bear market, initiated by the Terra crisis, shows its effect strongly until the recent stablecoin activity. With every negative news, the volatility and sharp movements in the cryptocurrency market began to aggravate investors.
In the days when action was taken to ensure regulatory clarity, the diversity of stablecoins came to the fore in order to prevent the chaos environment that may be created by the pressures on the US side. Binance has ignited crypto rescue operations by listing several unknown stablecoins.
Curse of Stablecoin: US Editions
The two most important US regulators, the SEC and the CFTC, are making moves to regulate and control the crypto industry. On the other hand, the New York regulator took its place in this struggle. The New York regulator came to the fore when it launched an investigation into Paxos and the BUSD it issues. The indirect involvement of the SEC and the US Department of Justice in the pressure on BUSD has revealed the clarity of the US on stablecoins.
In our interview with Efe Bulduk on March 11, various statements about stablecoins came from Bulduk. We found that the US can intervene wherever dollars enter and stablecoins are the first area to be regulated. According to the information provided by Bulduk, this is one of the most important reasons for the troublesome processes in BUSD and USDC.
The fact that the pressures even jumped to BUSD, in which billions of dollars were traded, started to make investors nervous. Tether (USDT), which attracted volume and investors in the period when these pressures intensified, reached a market value of close to 75 billion dollars and almost started to become a “monopoly”. Where sanctions, pressures and regulations were discussed, what could happen if the arrows were converted to USDT drew attention.
In addition, Efe Bulduk claimed that US regulators will suppress the crypto industry until they get their hands on it, and that these processes can happen frequently.
Why Does Binance Support the Stablecoin Diversity?
Binance CEO Changpeng Zhao (CZ) signaled that they will create stablecoin diversification at Binance, addressing the stablecoin pressures that have gained a heavy spot on the agenda. This move has managed to attract attention among the stablecoin problems.
Terra USD (UST), the chief architect of the Terra crisis, had pulled the crypto market to the bottom after the depeg and crash. In the Terra crisis, CZ stated that he wants to save the crypto industry and will fight for it. CZ took on a similar savior identity in the FTX problems months later. The one billion dollar fund he created to recover the markets can be given as an example.
Finally, CZ brought up stablecoin diversity in an effort to save the crypto industry from the pressures on stablecoins. Binance has listed many as yet unknown stablecoins. In addition, CZ signaled that many more stablecoins could be listed.
https://twitter.com/cz_binance/status/1634485823272886272
The reason for the diversification of stablecoins stands out as a move against US pressure. As Bulduk mentioned, stablecoins, which is an area where the dollar rotates, will not feel comfortable without seeing regulation. In such a case, the “monopoly” and “money concentrated” stablecoin could crash the entire crypto market in the first edition.
For this reason, there is an effort to create diversity in the crypto industry, just like in cryptocurrencies, in the case of stablecoins. CZ, one of the pioneers of this, is working hard to avoid liquidity problems like in a Terra and FTX crisis. Because the emerging liquidity crisis can drag all crypto organizations to the brink of bankruptcy.
The diversity of stablecoins in the crypto industry also enjoys support from most crypto investors. It is thought that it would be healthy to distribute the money accumulated in the top four stablecoins to all stablecoins.
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