Binance Limits USDC Stablecoin Support With BUSD ‘Auto-Convert’ Feature

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Binance has announced that it will auto­mat­i­cal­ly con­vert USDC, Pax Dol­lar (USDP), and TrueUSD (TUSD) to Binance USD (BUSD). The exchange says that this will boost liq­uid­i­ty and be to the ben­e­fit of users.

Binance exchange has announced an auto-con­vert fea­ture for the USD Coin (USDC) and oth­er sta­ble­coins with Binance USD (BUSD). The exchange pub­lished a post on Sept. 5 say­ing that USDC, Pax Dol­lar (USDP), and TrueUSD (TUSD) will be auto­mat­i­cal­ly con­vert­ed to BUSD for users’ exist­ing bal­ances and new deposits. 

The fea­ture will come into effect from Sept. 29.

The sta­ble­coins will be con­vert­ed at a 1:1 ratio, and bal­ances will auto­mat­i­cal­ly show a con­sol­i­dat­ed BUSD bal­ance. The exchange says that the auto­mat­ic con­ver­sion helps enhance liq­uid­i­ty and cap­i­tal effi­cien­cy for users. It does note that users will still be able to with­draw funds in USDC, USDP, and TUSD at a 1:1 ratio from their con­sol­i­dat­ed BUSD balance.

As such, Binance will remove spot trad­ing pairs asso­ci­at­ed with sev­er­al of the sta­ble­coins, includ­ing their pairs with BUSD. Binance will also remove USDC as mar­gin assets in futures trad­ing. It also makes sev­er­al changes to oth­er fea­tures on the plat­form, includ­ing sav­ing and stak­ing, liq­uid swap, cryp­to loans, Binance Pay, and Binance Gift Card.

Binance removing major stablecoins for trading

The auto-con­ver­sion move will make a huge impact on the sta­ble­coin mar­ket, which Teth­er (USDT) cur­rent­ly dom­i­nates. Tether’s sup­ply, an often dis­cussed point in the mar­ket, stands at 66.2 bil­lion, while BUSD has 19.1 bil­lion. Tether’s share of the total sta­ble­coin sup­ply has decreased over the past 12 months, cur­rent­ly at 46.7%, while USDC is at 30.36% and BUSD at 13.73%.

USDT cur­rent­ly has a mar­ket cap of $67.4 bil­lion, while BUSD has a mar­ket cap of $19.4 bil­lion. It’s worth not­ing that USDC has a mar­ket cap of $51.8 bil­lion, con­sid­er­ably high­er than BUSD. DAI, anoth­er pop­u­lar sta­ble­coin in DeFi, has $6.4 billion.

Discussions are aplenty as industry insiders chime in

The move by Binance to auto-con­vert to BUSD has pre­dictably stirred up dis­cus­sion on social media. There have been sev­er­al analy­ses made, though some appear to be not entire­ly accurate.

Win­ter­mute CEO Evge­ny Gaevoy chimed in on Twit­ter, clear­ing up what he called mis­lead­ing head­lines. He said that remov­ing sta­ble­coin pairs would be ben­e­fi­cial to liq­uid­i­ty and make mar­ket mak­ers more effi­cient. Fur­ther­more, he said that this was pos­i­tive for all sta­ble­coins involved and that it ben­e­fit­ed the cus­tomers because of the absence of con­vert­ing between stablecoins.

He did point out that USDT was notice­ably miss­ing, say­ing that the sta­ble­coin could lose ground until it improves oper­a­tional effi­cien­cy. His con­clu­sion was that Teth­er was los­ing ground to U.S.-native stablecoins.

Disclaimer

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