Jack Zhang, CEO of Airwallex, has stirred a debate in the financial sector by urging the shorting of USDC, a stablecoin issued by Circle. His remarks raise important questions about the role of stablecoins in the forex markets.
Statement from Airwallex CEO on USDC
On June 20, Jack Zhang posted on Platform X (formerly Twitter), calling for short positions on Circle, the issuer of USDC. He expressed doubts about the role of stablecoins in lowering foreign exchange costs. Zhang stated that, in his view, the implications of using stablecoins may not be as advantageous as presumed.
Challenges of Stablecoins: Development and Criticism
Zhang's remarks set the stage for discussions on the benefits of stablecoins compared to traditional forex markets, particularly regarding claimed cost reductions. However, he argued that using stablecoins for off-ramping can result in higher costs than interbank rates. His statements are part of broader criticism present in the fintech sector regarding the practicality of stablecoins.
Stablecoin Market Under Increasing Scrutiny
Recent updates indicate that USDC maintains a stable price of $1.00 with a market capitalization of 61.40 billion dollars, despite a slight drop in the 24-hour trading volume, which reached 6.71 billion. Zhang also noted that he sees no way in which stablecoins can reduce costs, pointing to high prices when converting stablecoins to fiat. His remarks underscore the need for more thorough regulation and a reevaluation of stablecoins.
Debates surrounding stablecoins like USDC and their roles in the forex markets continue to evolve. Jack Zhang's comments highlight the necessity of examining the advantages and disadvantages of using stablecoins, which may influence their future trajectory in the fintech industry.
