The regulators are going after stablecoins. As a part of cracking down on crypto, regulators make their moves one by one. Crypto exchange Kraken paid the SEC a $30 million fine and stopped providing crypto staking services to U.S. customers.
US dollar-based stablecoin Binance USD (BUSD) is defined as a security and the BUSD issuer Paxos gets an order from the New York Department of Financial Services (NYDFS) to stop issuing BUSD. You can ask questions about how they can call stablecoin security whereas there is no intention of buying stablecoin to make a profit.
Looks like nothing stops them from putting a level on crypto the way they want. Instead of giving regulatory clarity, they love to sue and charge fines. If you hold BUSD, you should seriously consider this. You cannot say everything is FUD where there are some facts.
We see unexpected things happen in crypto that most people did not think of before. So which stablecoins do you hold? Will you move to USDC because that's regulatory compliance? If you pay close attention to what's happening recently, the centralized authority goes hard on companies that are well-known for regulatory compliance.
You cannot say for sure what they are going after next. Maybe they target stablecoins one by one and USDC can be the next. Or, is it just a game of pushing one stablecoin up by reducing the competition?
Due to regulatory scrutiny on US dollar-based stablecoins, we may see more attention to other stablecoins that are based on other fiat currencies. But the way people value and evaluate everything in terms of dollar value will not change any time soon.
No matter which stablecoin you hold, you have a risk. You can think of algorithmic stablecoins. It is not backed by holding fiat currency. But again there is a risk of losing the dollar peg at some point. It is better to understand the risk you take when you hold any stablecoin. You can act quickly based on the changing situation.
So what do you think? Please feel free to leave your comments. Thank you for reading this post. That's it for now. I'll be back with another post.
0.000 SRY