With U.S. regulators effectively canceling Binance-branded BUSD stablecoin, the world’s largest cryptocurrency exchange is now looking beyond dollar-based stablecoins – and it has received notable interest from potential partners.
Patrick Hillmann, Binance’s chief strategy officer, has said that multiple private and public entities have shown interest in collaborating with the exchange on launching another stablecoin, one that might not be dollar-based.
“There are very interesting opportunities, particularly in Europe and the Middle East,” Hillmann said in an interview with Forbes, without providing more details.
The idea of Binance issuing a non-dollar stablecoin is not entirely new. Last week, Binance CEO Changpeng Zhao said in a Twitter post that the company is exploring other issuers and non-USD based stablecoins.
However, experts have claimed that such a pivot could prove to be difficult, and the stablecoin might hardly find any significant adoption.
For instance, the largest non-dollar fiat-backed stablecoin is currently 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 of the many reasons it has taken so long for non-USD stablecoins to become prevalent is regulations,” said Kevin Zhang, cofounder of DFX Finance, a decentralized finance protocol for non-U.S. dollar stablecoins, adding:
“Stablecoin issuers are looking for ways to properly get regulated without making numerous assumptions and spending insane amounts of money on lawyers to provide opinions.”
Zhang, however, noted that the recent hostile attitude by U.S. regulators creates an opportunity for non-USD stablecoins. “Binance being the size that they are and having the reach that they have will always be a relevant player in the stablecoin space. The denomination of trading pairs in certain stablecoins creates huge network effects,” he added.
Last week, the New York Department of Financial Services (DFS) ordered Paxos, a crypto firm that issues Binance’s stablecoin Binance USD (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 Losing Foot in the U.S.
Aside from the saga around its stablecoin, Binance has been facing increasing difficulty in the U.S. on a number of other fronts, too. 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 announced that it is temporarily suspending U.S. dollar withdrawals and deposits for international customers earlier this month.
And prior to that, US authorities sent subpoenas to American hedge funds and market-making companies dealing with Binance, asking for records of their communications with the exchange.
