“Crypto Industry Needs Crypto-Backed Stablecoins, Binance CEO Acknowledges” By CoinEdition

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© Igor Faun “Crypto Industry Needs Crypto-Backed Stablecoins, Binance CEO Acknowledges
  • Changpeng Zhao worries about USDT and USDC following US bank collapse.
  • Emabattked Silicon Valley Bank has $209 billion in total assets.
  • USDC has over $3 billion with the troubled US Silicon Valley Bank.

Changpeng Zhao, the CEO of Binance, the largest crypto exchange, recognized the importance of crypto-backed stablecoins today in the wake of the bankruptcy of two prominent banks in the United States.

“Banks are a risk to fiat-backed stablecoins,” Zhao tweeted. A Twitter blue subscriber noted that and other cryptocurrencies emerged to avoid the pitfalls of the traditional financial system. “If you mix crypto with fiat, you get trapped,” they argued.

In response, the CEO of Binance said the founder of the now-defunct Luna blockchain, Do Kwon, had the idea but “failed miserably on execution.” He then acknowledged the potential of crypto-backed stablecoins to avoid overreliance on fiat currencies.

Notably, crypto investors lost over $60 million last year in the collapse of the Terra Luna projects, which included a crypto-backed stablecoin, UST, and its native utility token, LUNA. Similarly, the two US banks that went bankrupt last week are Silicon Valley Bank (SVB), with $209 billion in total assets, and Silvergate, a crypto-focused bank.

Some of the fiat-backed stablecoins on the market include USDT, with over $72 billion in market share, and USDC, with nearly $39 billion market capitalization. According to reports, USDC has over $3 billion in reserves in the troubled US Silicon Valley Bank.

Yesterday, the Binance CEO mocked US detractors as SVB and Silvergate became insolvent and unable to process customer withdrawals. “They FUD us, and banks fail,” Zhao tweeted, referring to how Binance remained strong despite the constant negative propaganda it suffered from US entities that wished the exchange would fail.

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