In a statement, the world’s largest cryptocurrency exchange Binance said it will automatically convert users’ balances and new deposits of stablecoins USD Coin, Pax Dollar, and True USD into Binance USD (BUSD) – its native stablecoin.
“In order to enhance liquidity and capital-efficiency for users, Binance is introducing BUSD Auto-Conversion for users’ existing balances and new deposits of USDC, USDP and TUSD stablecoins at a 1:1 ratio. With effect from 2022-09-29 03:00 (UTC), users will trade with a consolidated BUSD balance on the Binance Platform that reflects their balances of these four stablecoins (BUSD, USDC, USDP, and TUSD) post-conversion,” Binance said in its statement.
Stablecoin gained popularity for its design that makes it maintain a constant value pegged to a fiat currency, such as the dollar. Unlike cryptocurrencies saddled with price fluctuations, stablecoins are designed to be stable in value. Although due to extreme market conditions, a few stablecoins recently fell below their $1 tag. Stablecoins are important for the facilitation of crypto trading and for storing idle crypto cash without the need to convert them back into fiat currency.
Binance also mentioned that it will stop trading on spot pairs which include USD Coin, Pax Dollar, and True USD. Users will, however, still be able to withdraw funds in the form of these stablecoins. “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,” Binance said adding that the conversion of users’ holdings will take effect on September 29th.
USD Coin (USDC) has a market cap of $51.8 billion and is the world’s second-largest stablecoin. It is issued by US firm Circle. Binance’s stablecoin BUSD has a market cap of about $19.4 billion.
Binance also mentioned that USDC products affected will include saving accounts, DeFi staking subscriptions, and crypto loans which will be closed and liquidated on September 23rd.
In a tweet, Circle’s CEO Jeremy Allaire said that “converged dollar books on Binance is a good thing. USDC utility just increased,” while also predicting in another tweet that the development will see USD Coin and Binance USD gain market share from Tether. Tether holds the title of the world’s largest stablecoin.
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
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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