Binance is set to phase out three well-known stablecoins, specifically USD Coin (USDC), Pax Dollar (USDP), and True USD (TUSD), by the end of September.
While much of the U.S. was unwinding over the Labor Day holiday, Binance Binance kicked off the week by announcing a significant change that is expected to rock the crypto industry. The exchange will discontinue support for USDC, USDP, and TUSD by the conclusion of September, instead opting to use its proprietary stablecoin, BUSD, across its services.
According to CoinDesk Opinion Circle’s USDC, with a market cap of approximately $53 billion, holds the second spot in the stablecoin market, trailing only behind Tether’s renowned USDT, which has recently been losing ground. depegged earlier this year .
As noted by CoinDesk, TUSD and USDP currently sit as the sixth and seventh largest stablecoins, boasting market caps exceeding $1 billion and $1 billion, respectively. stablecoins Binance’s BUSD has gained considerable traction as the third-largest stablecoin, reported to have a market cap nearing $20 billion, according to data from Messari.
CoinMarketCap highlighted that trading volume for BUSD skyrocketed by over 56% following this announcement, reaching daily trade volumes exceeding $6.5 billion. TechCrunch At 3:00 UTC on September 29, Binance's Auto-Conversion feature will automatically change existing balances and new deposits of USDC, USDP, and TUSD into BUSD at a 1:1 conversion rate. Users can expect these new balances to be activated within a day. For those eager to proceed early, a manual conversion option will be available starting on September 26.
What’s happening when?
It’s important to remember that during this conversion period, users can only convert USDC, USDP, and TUSD to BUSD, with no option available to convert back in the opposite direction. Their blog also reassures users that they will still have the ability to withdraw in the original stablecoins at a 1:1 ratio corresponding to their BUSD balances. USDC Transitioning these coins across Binance's array of offerings will unfold in a phased manner. As of September 7, the platform will no longer accept Futures deposits involving these outgoing stablecoins. Their blog posts caution users against making deposits in USDC or any other outgoing stablecoins during this time, as they will not be liable for losses from the conversions.
On the same day, margin lending will be terminated, and any open positions will be resolved and liquidated by September 23. Crypto loans will follow a similar timeline, with all savings initiatives and swaps ceasing by the same date. Trading of the aforementioned stablecoins will be halted by September 29, and the ability to create gift cards for USDC and TUSD has already been suspended, with redemption options expiring on September 29.
What motivations lie behind Binance's decision? And why is Tether absent from the list?
Binance articulated that this strategic move aims to \"boost liquidity and enhance capital-efficiency for its users.\" The underlying implication that has sparked debate is that this effectively positions BUSD as the primary stablecoin for Binance's vast user community. staking Various media outlets have questioned why Tether has remained untouched. The Wall Street Journal sought clarity from Binance regarding their decision-making process, but there’s been no response.
Some analysts have scrutinized Binance’s authority to make such a decision. While some have cited concerns around antitrust regulations, others seem to step back for a broader view.
On September 29, they will pave the way for their own stablecoin to thrive. This development poses a significant challenge for Circle and Coinbase, with the adoption of USDC facing serious repercussions!
Ilan Solot, a partner at Tagus Capital LLP, remarked that this move represents a strategic play in the competitive landscape of stablecoin market involvement.
According to analysis based on market dynamics, it appears that a significant portion of this transition may have already occurred. While refining dollar liquidity on the largest exchange in the world may offer advantages, it also raises questions about market conduct practices.
Echoing that sentiment, Allaire suggested that this movement could catalyze a gradual transfer of market share from USDT to BUSD and USDC, linking to insights shared by Wintermute Exchange's CEO Evgeny Gaevoy. Wall Street Journal Circle remarked to media that although USDC remains operational on other leading exchanges, there are still implications worth considering.
Additionally, Binance's latest strategy has drawn similarities to a prior decision made by another exchange to merge their US dollar and USDC order books back in July—an initiative likely aimed at enhancing liquidity. Circle spokesperson told TechCrunch.
Ultimately, how this plays out hinges on public sentiment and market valuations. As we stand, it’s clear that we will observe the effects of Binance’s audacious decision unfold by the end of this month. Bloomberg The Ukrainian football team Shakhtar Donetsk is gearing up to launch NFTs as a means to support Ukraine.
In the wake of the August 8 sanctions on Tornado Cash, MakerDAO faces turmoil, prompting questions about USDC's collateralization strategy. Twitter Please remember that the content presented on this page does not constitute legal, tax, investment, or any other professional advice. It’s crucial to invest only what you can afford to lose and to seek professional financial guidance should you have any uncertainties. For more insights, feel free to consult the terms and conditions along with the support resources provided by the issuer or advertiser. MetaversePost strives for accurate and unbiased reporting, but market conditions are subject to swift changes.
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In line with the Trust Project guidelines As Americans were enjoying their Labor Day weekend, Binance stirred the crypto community with a significant announcement to kick off the week.