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Shroder thinks more cryptocurrency companies will be affected by the Terra incident in the coming months.
Brian Shroder, the CEO of Binance.US, said in a recent interview with Business Insider that he is not surprised by the numerous unfortunate incidents that have happened in the cryptocurrency space in the past few weeks.
Binance.US CEO compared recent events in the cryptocurrency space with the dot-com boom, adding that increased adoption in the nascent asset class – cryptos – is usually accompanied by hiccups.
“There’s always hiccups because that is just how adoption curves work. When new technology emerges and investors flood into it. A lot of bets are in place, and not everyone’s going to survive,” Shroder was quoted as saying in an interview with Business Insider.
Cryptocurrency Market Crash After $UST Collapse
The value of the cryptocurrency market plummeted massively following the collapse of Terra ecosystem tokens LUNA and TerraUSD (UST).
Trouble started after Terra’s algorithmic stablecoin UST lost its peg to the dollar, which did not only affect its sister token LUNA, but the entire cryptocurrencies in existence.
The unfortunate development also affected popular cryptocurrency project Three Arrow Capital (3AC), a company that is heavily invested in Terra, which was recently ordered to file for liquidation.
Similarly, Celsius Network was forced to suspend users’ token withdrawals, transfers, and swaps on its platform, as the company cited unfavorable market conditions which also connect to the Terra problem.
Many cryptocurrency companies have announced huge staff layoffs to cope with the decline in digital currency prices, as they hope that things get back on track in earnest.
Shroder: More Companies to Liquidate
While crypto-related companies are trying to cope with the negative impact of the Terra incident, the United States financial authorities introduced stringent monetary policies to mitigate rising inflation.
Following recent developments, Shroder has predicted that more crypto companies will go out of business as things gradually become the survival of the fittest.
Binance.US Favors Clearer Crypto Regulations
On top of everything, Shroder said the U.S. arm of the world’s largest cryptocurrency exchange is in support of having clearer regulations for the nascent industry as it would go a long way to keeping investors protected, thus boosting confidence.
“We are super supportive of rallying behind a formal definition of these so that you can go out and make claims that this is a stablecoin, as certified by the United States Congress,” Shroder added.
Shroder Ignores $BUSD, Picks $USDC and $USDP As His Favorite Stablecoins
With the collapse of Terra’s algorithmic stablecoin, Shroder picked the two stablecoins he has faith in. While many would expect the CEO of Binance.US to pick Binance USD (BUSD), Shroder noted that he is more confident in two stablecoins, the USD Coin (USDC) and Paxos (USDP).
“But for Circle and Paxos, these are more along the lines of what Congress will define as a stablecoin,” Shroder said.
Shroder expresses confidence in $USDC and $PAX because both stablecoins are denominated in the dollar and are backed by the fiat currency on a 1:1 ratio.