TLDR
- Changpeng Zhao stated that stablecoins have surpassed CBDCs in global relevance.
- He said many countries have halted or canceled their CBDC projects due to low demand and high development costs.
- The GENIUS Act in the United States and Hong Kong’s Stablecoin Ordinance support the rise of stablecoins.
- Zhao explained that stablecoins are more practical because they are backed by real collateral and market trust.
- Countries such as Japan, Singapore, and South Korea have paused their CBDC plans.
Changpeng “CZ” Zhao, former Binance CEO, declared that stablecoins have overtaken Central Bank Digital Currencies (CBDCs) globally. During his keynote at the WebX conference in Tokyo, he argued that CBDCs are now outdated. He emphasized that stablecoins are gaining more adoption and regulatory momentum than government-issued digital currencies.
CBDC Projects Fading Amid Stablecoin Rise
Several countries have paused or canceled CBDC initiatives due to low demand and high development costs. According to Zhao, many CBDC pilots started around 2013 but have now stalled as stablecoins gained market share. He cited the Bahamas’ Sand Dollar, Nigeria’s eNaira, and Ghana’s e-Cedi as rare examples that reached actual deployment.
Moreover, countries like Japan, Denmark, and Finland have shifted focus away from CBDCs after encountering limited retail use cases. South Korea and Singapore also halted testing phases, citing practical difficulties and poor scalability. In the U.S., the GENIUS Act reinforced regulatory support for stablecoins, marking a significant policy shift.
Zhao stated, “CBDCs are already outdated. In contrast, stablecoins are gaining more attention.” His comments reflect the market’s growing reliance on private sector-backed assets.
Governments Embrace Stablecoin Frameworks
Governments are now crafting legal structures for stablecoin growth rather than pushing CBDC adoption. Hong Kong introduced its Stablecoin Ordinance, while the U.S. passed the GENIUS Act to guide issuance standards. These developments suggest that fiat-backed digital assets have become a more feasible alternative to CBDCs.
China, despite banning crypto activities, is also researching a yuan-based stablecoin to counter U.S. dollar-backed tokens. According to Zhao, this indicates a softening stance toward crypto-backed instruments. The move shows how stablecoins are reshaping policy, even in traditionally resistant jurisdictions.
Standard Chartered recently projected the stablecoin market will reach $2 trillion, up from $260 billion. This explosive forecast underlines growing investor and institutional interest, far beyond what CBDC projects have achieved. Consequently, many central banks are revising their digital currency strategies.
The Bank of England is rethinking its plans for a digital pound amid rising stablecoin interest. Officials have suggested prioritizing tokenized deposits over CBDCs to achieve similar benefits. While the final decision is pending, market signals show that stablecoins are now leading digital payment innovation.
