Soon after Binance’s announcement, BUSD’s daily trading volumes by more than 56% to over $6.5 billion.
On Monday, September 5, the world’s largest cryptocurrency exchange Binance made a major announcement to discontinue the support for stablecoins such as USDC, USDP, and TUSD.
Binance and Its Support for Stablecoins
The crypto exchange announced that it will automatically move customers’ funds in stablecoins to its native stablecoin Binance USD (BUSD). This conversion will be applicable to investments in USDC, Pax Dollar (USDP) and TrueUSD (TUSD), and shall happen on September 29. Post the deadline, Binance will automatically convert the money to BUSD. Besides, customers can also choose to withdraw money denominated in USDC, USDP or TUSD while removing it from Binance. In its official blog post, Binance noted:
“This will not affect users’ choice of withdrawal: users will continue to be able to withdraw funds in USDC, USDP and TUSD at a 1:1 ratio to their BUSD denominated account balance”.
The War of Stablecoins
Amid the falling crypto market this year in 2022, stablecoins have been in great demand this year. Circle’s USDC is the world’s second-largest stablecoin by market cap and has emerged as a strong force challenging Tether for the top spot.
While Tether’s USDT has a market cap of $68 billion, that of circle’s USDC is $52 billion. On the other hand, Binance’s BUSD is placed at the third spot with a $19 billion market cap. This move by the world’s largest crypto trading platform Binance could put BUSD in closer competition with USDC.
Binance’s announcement on Monday jumped BUSD’s daily trading volumes by more than 56% to over $6.5 billion. Speaking on the matter, a Circle spokesperson told TechCrunch:
“Based on market activity, it would seem much of this transition has already passed and while optimizing dollar liquidity on the world’s largest exchange may carry benefits, the paradigm does raise potential market conduct questions”.
Stablecoins have been one of the widely used digital assets in the crypto space. They serve as the digital substitutes for the US Dollar and other fiat currencies. The concept behind stablecoins is that their price isn’t as volatile as other public cryptocurrencies.
Crypto exchange Binance has been expanding its wings in the market and the latest development will give BUSD a major liquidity boost in the crypto space.
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