CZ: cryptocurrency may use more non-US dollars or algorithmic stable currencies in the future

On February 14, CZ said in a speech on Binance’s official Twitter Space that the stable currency is still very important at this stage, and most people still need legal tender, such as the US dollar and cryptocurrency transactions. Therefore, most stable currencies are now anchored with the US dollar, and there may be non-US dollar stable currencies in the future, such as the Japanese yen stable currency and the Singapore dollar stable currency, but the stable currency needs better transparency and reserves.

Interpretation of this information:

The message from CZ, CEO of Binance, highlights the significance of stable currencies at this stage, despite their noted limitations. The stable currency market has grown in importance over the years as a way to minimize cryptocurrency price volatility, especially for traders who prefer holding their funds in non-volatile digital currency. Stable currencies or stablecoins, as they are commonly known, are a type of cryptocurrency pegged to the value of another asset, such as the US dollar.

CZ affirms that stable currencies continue to play a vital role in the cryptocurrency industry. Many people still need legal tender, such as the US dollar for everyday transactions, and thus, stablecoins will remain a crucial element. For this reason, most stablecoins are currently anchored with the US dollar, which is the world’s main reserve currency. However, CZ also highlights the potential emergence of non-US dollar-based stable currencies in the future, such as the Japanese yen and the Singapore dollar. The addition of these stablecoins would allow participants in the market to diversify their investments and hedge against the fluctuations in the US dollar.

Furthermore, CZ also accentuates that stablecoins require better transparency and reserves. With the digital currency market at its peak, a high level of transparency is essential to dispel potential controversies and enhance investor confidence. Additionally, the transparency of the reserves backing these stable coins plays an essential role in mitigating any potential systemic risk that could occur in the event of the backing assets’ failure. It is imperative that stablecoin issuers maintain a high level of transparency and regularly undergo independent audits.

To conclude, CZ’s opinion on the importance of stable currencies and their future prospects in the cryptocurrency sector will help shape the industry. Market players should prioritize transparency and use reliable backing mechanisms to strengthen investor faith in stable currencies, which could reduce the market’s volatility in the future.