• Binance CEO Changpeng Zhao (CZ) said that stablecoin regulation could help accelerate its adoption.
• Financial regulators have increased their regulatory efforts around the space due to the collapse of Terra’s algorithmic stablecoin UST.
• CZ praised the Hong Kong government’s „decedent approach“ to stablecoins which will provide a more defined scope for regulated activities.
Binance CEO Changpeng Zhao (CZ) has recently said that the regulation of stablecoins could help accelerate their adoption. This comes as financial regulators around the world have increased their regulatory efforts around the space due to the collapse of Terra’s algorithmic stablecoin UST.
CZ has praised the Hong Kong government’s „decided approach“ to stablecoins, which will provide a more defined scope for regulated activities. This includes governance, issuance, stabilization arrangements, and wallets – including access and holdings management. CZ noted that this risk-based approach will help to mitigate risk to monetary & financial systems.
Stablecoins have been gaining traction in the past year, with their use cases expanding in cross-border payments, hedging against inflation, and even aid disbursement. CZ has said that “with the right regulatory framework in place, we can see rapid adoption of these financial instruments.”
The Binance CEO noted that this regulatory framework should also include measures to ensure the security of assets and protection of user’s rights. He said, “The right regulatory framework should include measures to ensure stakeholders’ assets and rights are secured, and that users are put first in all decisions.”
CZ believes that the regulation of stablecoins will help to build trust and confidence in the asset class, which will in turn help to accelerate its adoption. He concluded, “Regulation will help build trust and confidence in the asset class, and help with the adoption process. Regulated stablecoins could be a key part of the financial infrastructure of the future.”