The U.S. Regulators' Stablecoin Regulation Will Open Cryptocurrency Prosperity

"The U.S. regulatory authority's Stablecoin regulation is a sign that means a 'market prosperity period', not a 'market ice age'."

# 'Stablecoin Fear' Started in BUSD of Binance

Recently, the cryptocurrency market has been in great fear due to the U.S. regulatory agency's stablecoin crackdown.

Major U.S. regulators, including the U.S. Securities and Exchange Commission (SEC) and the New York Financial Services Agency (NYDFS), suddenly launched an crackdown on the world's third-largest stablecoin Binance USD (BUSD) last week.

NYDFS suddenly ordered the suspension of BUSD's issuance, pointing out the finance stability of BUSD's issuer Paxos. A few days later, the SEC classified BUSD as an "unregistered securities" and announced corresponding punishment.

As BUSD was clamped by a series from U.S. regulators, the market entered a state of extreme tension. As the stablecoin, which plays a key role in the cryptocurrency market as a key currency in cryptocurrency transactions, and BUSD, which played a major role in the cryptocurrency market, were immediately suspended from issuance, the tension of "Who is the next?" began to weigh on the market.

As evidenced by this phenomenon, PayPal, which was preparing to issue its own stablecoin, suddenly announced the suspension of the stablecoin project this week. A PayPal spokesman who interviewed Bloomberg on the 13th said, "We were developing stablecoin, but we are temporarily suspending the current work due to cooperation with regulators."

# Cryptocurrency Market Surged Against Market Fear

Ironically, the cryptocurrency market showed an upward trend this week although the stablecoin scare stated in BUSD, weighed down the market.

Though some experts said "the crisis of BUSD is a crisis of Binance, which means a fall in the market," bitcoin(BTC) quickly surpassed $25,000 and many altcoins rose more than 5%. The price of cryptocurrency was like laughing at those who were betting on 'market decline (short)'.

Despite the fear of "Who will be the next target after BUSD?" the market remains relatively solid after the surge.

What can be seen from this is that the U.S. regulators' regulations on stablecoin are focused on 'growing the market', not 'killing the market', and the majority of investors are recognizing it.

# Stablecoin Regulations Create 'A Prosperous Period of the Cryptocurrnecy Market'

Stablecoin is a new financial tool that holds the blockchain with the value of the dollar, the legal currency of the United States and the key currency of the world. If stablecoin is well regulated and utilized, it can strengthen the hegemony of the dollar and incorporate a new asset market called 'cryptocurrency' into the existing asset market in a mature manner.

The U.S. Federal Reserve System(Fed) expressed this fact at the 'International Role of the U.S. dollar' meeting in July last year.

"The development of stablecoin will further strengthen the role of the dollar as a global key currency, raising the dollar's status," the Fed said in a report. "Cryptocurrency, including bitcoin, will not threaten the dollar's supremacy in the short term and will help strengthen the dollar's hegemony from a mid- to long-term perspective if the financil service using cryptocurrency would be well developed," added.

Due to the 'Luna crisis' and 'FTX crisis' last year, U.S. regulators have announced a clear strengthening of regulations.

The U.S. legislature has been speeding up the completion of cryptocurrency integration regulations this year as if it were fulfilling its pledge, which has led to a number of recent regulations. The main core agenda of the proposed cryptocurrency regulation plan is definitely stablecoin and Centralized Exchange (CEX) regulation.

In the end, this year, which will be the first year of regulation of the cryptocurrency industry, the regulation of stablecoin and the resulting short-term fear are indispensable gates for the cryptocurrency market.

The U.S. regulators' regulation of Stablecoin is the last step in institutionalizing cryptocurrency as an official asset.

권승원 기자 ksw@