“Banks pose risk to fiat-backed stablecoins,” Binance CEO says via CoinEdition

© Igor Faun “Banks are a risk to fiat-backed stablecoins” says Binance CEO
  • Binance CEO worries about USDT and USDC after US bank collapse.
  • Emabattked Silicon Valley bank has $209 billion in total assets.
  • USDC has more than $3 billion with troubled US Silicon Valley bank.

Changpeng Zhao, CEO of Binance, the largest crypto exchange, expressed his concerns on Twitter today about the safety of stablecoins baked into fiat currencies following the bankruptcies of two prominent US banks.

“Banks pose a risk to the securities-backed stablecoins,” Zhao wrote on Twitter. One blue Twitter subscriber concluded that this and other cryptocurrencies arose to avoid the failures of the traditional financial system. “If you mix cryptocurrency with fiat currency, you get trapped,” they argued.

Moreover, another cryptocurrency enthusiast suggested that the crypto industry needs crypto-backed stablecoins to avoid over-reliance on fiat currencies. In response, the CEO of Binance said that the founder of the ill-fated Luna blockchain, Do Kwon, had the idea but “failed miserably with the execution.”

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

Some of the fiat-backed stablecoins in the market include USDT, with a market share of over $72 billion, and USDC with a market cap of roughly $39 billion. According to reports, USDC has more than $3 billion in reserves in the troubled US bank Silicon Valley.

Yesterday, the CEO of Binance taunted US critics as SVB and Silvergate became insolvent and unable to process customer withdrawals. “They are screwing us, and banks are failing,” Zhao wrote on Twitter, referring to how Binance has remained strong despite the constant negative publicity it has suffered from US entities hoping the exchange will fail.

Binance CEO Says Post “Banks Pose a Risk to Fiat-Backed Stablecoins,” first appeared in Coin Edition.

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