Binance has cut loose competing stablecoins including USDC, USDP (Paxos), and TUSD (TrueUSD). USDC, issued by Circle is the second largest dollar-based stablecoin after USDT (Tether) and may receive the brunt of the change.
In a corporate statement, Binance said it would “auto-convert” these stablecoins to Binance USD or BUSD – their inhouse dollar stablecoin – on a one-to-one basis. Binance said it may amend the list of stablecoins eligible for auto-conversion.
The move will impact trading pairs, margin, futures, and more.
Binance will also cease offering USDC Flexible Savings and DeFi Staking subscriptions and all USDC subscribed to Flexible Savings and DeFi Staking will be automatically redeemed and deposited into users’ spot wallets.
The outline of the changes is available here.
Binance, the largest crypto exchange in the world, did not incorporate a note as to why the company decided to make the move to remove other stablecoins.
It was interesting to note that Circle CEO Jeremy Allaire retweeted a thread on the impact on USDC that indicated it would actually benefit USDC.
On USDC news. Found most headlines very much misleading. My 5 cents:
— wishful cynic (@EvgenyGaevoy) September 5, 2022
The tweet thread states that:
“…this is positive for USDC (and TUSD and others) – you should still be able to deposit and withdraw USDC seamlessly to/from binance. Before this change you would need to convert it to BUSD/USDT and then use it to trade margined perps.”
Because users may still deposit USDC etc., Gaevoy says: “To sum up: it’s not USDC “delisting”, it’s another big step towards Tether losing ground to US-native stablecoins.”
USDC has been gaining ground on Tether – which has been the target of regulatory enforcement actions. Circle is seeking a federal bank charter, if approved, should allow it to leapfrog its main competitor.
Allaire in his own response said that USDC utility just increased.
Helpful perspective from @wintermute_t , which is spot on. Converged dollar books on Binance — now same as on FTX and Coinbase — is a good thing. USDC utility just increased. https://t.co/QWfMx7f1cZ
— Jeremy Allaire (@jerallaire) September 5, 2022
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