BUSD clampdown prompts Binance to eye non-US dollar stablecoins

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Monday’s clampdown on the Binance USD (BUSD) stablecoin, still the world’s third-largest stablecoin by market cap at the time of writing, has thrown the market into turmoil.

Under orders from the New York Department of Financial Services (NYDFS), BUSD issuer Paxos will stop minting the stablecoin by February 21, driving investors toward other stablecoins – namely Tether.

Binance CEO Changpeng Zhao apparently has had enough and on Tuesday, commented in a Twitter Space chat that the crypto industry should start reducing its dependence on stablecoins pegged to the US dollar.

“As a result of this we probably will see more euro based or other Japanese yen, Singapore dollar based stablecoins, so it’s actually prompted us to look for more options in different places,” said Zhao.

That Asia-Pacific stablecoins are strong contenders should not be a surprise, given crypto’s popularity in the region and improving regulatory clarity in various jurisdictions, including Japan and Singapore.

This week’s premium story looks at Japanese yen (JPY) stablecoins. Pegged to the currency of the world’s third-largest economy, JPY stablecoins could give the domestic crypto sector a boost while serving as efficient payment rails for Japanese conglomerates that operate globally.

— Shihan

🤿 THE DEEP DIVE

US stablecoin clampdown may give Japan a chance to shine

Image credit: Timmy Loen

Japan has banned all stablecoins that aren’t issued by banks – whether pegged to the US dollar or the Japanese yen. But the government, under the leadership of Prime Minister Fumio Kishida, has put Web3 on high priority and will allow certain stablecoins with the release of new regulations starting in June.

I spoke to Ken Nakamura, the CEO of GMO Trust, to find out how the company is positioning itself for a crypto-friendlier Japan. GMO Trust is a New York-based subsidiary of the Japanese conglomerate GMO Internet Group. Regulated by the NYDFS, it issues the JPY-pegged GYEN and the US dollar-pegged ZUSD stablecoins.

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