Ana Ojeda, CEO of LegalRocks and Business Developer at Reserve believes that there will be a hybrid financial system where fiat currencies, bitcoin, stablecoins and other financial instruments meet some minimum requirements.
Stable currencies, in addition to being a crypto-financial instrument, have represented, especially in the last five years, an escape route, or respite for those people who suffer from the ravages of inflation or currency devaluation in their respective countries. However, some institutions or countries, because their hegemony and control are threatened, decide to take action on the matter, generating some uncertainty in the market and therefore also in the ecosystem comprised of investors or users who are forced to study reality. of facts, consider opinions and watch the development of the news.
Earlier this week, the fact that the blockchain infrastructure platform “Paxos Trust Company” made headlines announced that it will stop minting BUSD stablecoins for Binance starting this February 21in accordance with the instructions and coordination with the New York Department of Financial Services (NYDFS).
For this reason, to deepen and understand in more detail what is happening around us, we have talked with Ana Ojeda, CEO of LegalRocks and Business Developer at Reserve.
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Firstly, Ojeda called the mandate towards Paxos with BUSD a first direct move against stablecoins by US regulators, and He recalled that already in 2022 different US organizations, including the Securities and Exchange Commission (SEC) and also the Treasury Department, referred to stablecoins as a national priority at the regulatory level, because they considered that they violated the use of the dollar, their hegemony and dominance.
“For some people this does not seem to make sense, since many of the stablecoins are anchored in Fiat money, or rather in dollars. This does not mean that the US system or that the dollar is out of business. Although many are backed in dollars, people are using them without directly touching a bank and there is a use case there that is important”Ojeda commented.
“The United States is concerned that people use a non-traditional financial system where they are trading in a currency that is not directly regulated by the Securities and Exchange Commission, and thus dominance may be lost one way or another. of the Government of the United States, not only at the economic level, but at the geopolitical level on other countries that could be implementing the use of both Bitcoin and stablecoins”he explained.
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Affectations to BUSD
According to Ojeda, as a result of this decision by Paxos, the effects on BUSD would be direct, therefore, he warned that it would be irresponsible to say that there is a run or some kind of bottom in BUSD, despite the fact that it is being seeing how thousands of users are leaving BUSD liquidity on Binance or swapping for other assets such as USDT, USDC, DAI; because they are afraid that the token will stop working or lose 1:1 parity, a bit like what happened with UST, Terra’s stablecoin at the timealthough they are obviously different ecosystems.
“I think that in general this is going to affect its adoption or use, because people are not going to trust BUSD as much anymore knowing that Paxos, their main issuer, has said that they are going to stop issuing it, which means that they are not going to There’s going to be as much circulation in the market, there’s not going to be as much liquidity and the use cases are going to decrease, and I think it’s going to end up being BUSD as an experiment that will stay inside Binance for certain trades, but I can’t guess what it’s going to be. because we do not know what the regulatory outcome will be that involves the SEC and that I think will also involve the Department of the Treasury”said.
In this sense, Ojeda also revealed that he believes that what happens in regulations in the United States is always a starting point for regulators in other countries, who always keep an eye on what the Treasury Department, the Securities and Exchange Commission, and the Commodity Commission, because in some way or another it is about the USA, the power “more important” of the world, economically speaking, and from which no regulator from a small country or from a third world country wants to go against their regulatory line.
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“It is a very interesting political issue because the regulatory does not escape the political and what I think will happen is that organizations such as the World Economic Forum, the International Financial Action Task Force (GAFI), which even already has several recommendations in this regard about stablecoins, they are going to have a little stronger comments and they are going to be more insistent on the fact that stablecoins must be regulated”he mentioned.
Stable coins, a threat to the financial system?
Finally, regarding whether stablecoins posed any threat to the financial system, a statement issued by various institutions, Ojeda explained that she was not convinced that stablecoins would replace the dollar, the euro, or any fiat currency. In his opinion, we are going to have a financial system “hybrid” where we are going to see people using fiat money, along with stablecoins, Bitcoin and other assets that can provide people with the following characteristics: easy to trade, people can pay low commissions and fast transaction times.
“If an asset meets those three requirements, I believe it will be an asset that will be successful and that can compete, but not replace, the dollar or any other currency issued by a state”Ojeda declared.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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