Binance claims that the move will enhance liquidity and capital efficiency for users.
Users will still be able to withdraw funds in USDC, USDP and TUSD at a 1-to-1 ratio
Photo Credit: Unsplash/ Vadim Artyukhin
Binance is moving to prioritise its own stablecoin, BUSD, over several others on its cryptocurrency exchange, announcing a "BUSD Auto-Conversion" that will begin on September 29 to "enhance liquidity and capital-efficiency for users." Binance is introducing the conversion for users' existing balances and new deposits of USDC, USDP and TUSD stablecoins at a 1:1 ratio. The move is a significant one for the exchange as USDC is the second-largest stablecoin by total supply, while the USDC/USDT pair happens to rank 11th among the highest trading pairs by volume.
"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. 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 company said.
Binance will also end trading pairs for the three stablecoins against BUSD and Tether (USDT) as well as major cryptocurrencies like Bitcoin and Ether. The stablecoin-to-stablecoin pairs will close on September 26, with the stablecoin-to-crypto pairs ending on September 29.
"All pending trade orders will be automatically removed after trading ceases in each respective trading pair. Users can then trade the assets in the respective BUSD trading pairs," Binance said. The announced changes cut across a number of Binance services beyond its exchange, including its staking, payment and gift card offerings.
CEO Changpeng Zhao clarified in a tweet that Binance was not delisting USDC and users will still be able to deposit and withdraw USDC.
USDC is the second-largest stablecoin in the crypto space, with a market cap of $52 billion (roughly Rs. 4,15,330 crore). The Binance-backed stablecoin is ranked third with a market cap of $19.5 billion (roughly Rs. 150 crore), while TUSD ranks fifth with a market cap of $1 billion (roughly Rs. 7,990 crore). USDP is ranked sixth and has a market cap of $945 million (roughly Rs. 7,550 crore).
Tether's USDT is the dominant stablecoin in the space, with a market cap of $67 billion (roughly Rs. 5,35,140 crore), accounting for over 80 percent of the trading volume in the industry.
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