(Binance conversion promotes liquidity – the new move is implemented to enhance the platform efficiency)
Binance, One of the largest crypto exchange platforms, promotes liquidity and capital efficiency for users. It said on Wednesday that three stablecoins, USD Coin (USDC), Pax Dollar, and True USD deposit, will now be converted into its stablecoin, Binance USD (BUSD). As a result, Binance USD will compete with its money coins, concreting in more stable and efficient digital tokens.
Beginning Sept. 29, Binance automatically converts US USD Coin (USDC), Pax Dollar, and True USD into BUSD coins.
As a result of this move, Binance will not welcome the margin and future trading opportunities with USDC, USDP, and TUSD pairs.
This new move will enhance the platform’s liquidity and capital efficiency, Binance said in a tweet.
Key Points
- Binance pay, a secured transaction app designed by Binance, also stopped accepting payments in (USDC). With the effect of this move from 2022-09-29 03:00 (UTC), users will now trade in BUSD on the Binance platform.
- The founder and CEO of Binance, Changpeng Zhao (CZ), said in a tweet that the move would consolidate the liquidity and stable price for exchange users. This new change will not likely affect the user’s choice to withdraw coins.
- BNC is stopping all types of future trading and marginal transactions in USDC; however, users will still be able to withdraw money in USDC, USDP, and TUSD; but they won’t have any custodial rights.
- Binance move for such a critical step can enhance the tension among the three largest stablecoins whose values are directly pegged to the U.S. dollar.
The move will not affect the user’s ability to withdraw their fund. Users can withdraw funds in USDC, USDP, and TUSD at a 1:1 ratio in their BUSD-denominated account.
Stablecoins are a vital part of the crypto ecosystem that are pegged to any external reference such as fiat currency. In addition, the move can bolster BUSD to enhance its status as the top marketplace for digital coins.
The move is bold and unprecedented, said Hagen Rooke law firm Reed Smith LLP in Singapore. But, commercially, it’s an intelligent move for Binance because it will bring more convergence around BUSD products.
He added that users would likely have money as all the stablecoins are intended to peg with the U.S. dollar. However, the move can irritate the users who are willing to use their owned stablecoins like USDC on the applications which support the USDC, Rooke said.
The top stablecoins, Tethers USDT, USDC, and BUSD, were trading around $1 on Tuesday.
Impact Of Announcement
In September, the platform will formally implement the new auto-converted move. In addition, the Bao cryptocurrency was also assumed to increase liquidity in August.
The announcement also signifies that users will withdraw unsupported coins previously they could not retrieve. Users have to select which type of stable they want to withdraw from their account.
In response to this move, Jeremy Allaire, Jeremy Allaire, supported the decision by posting a tweet about Converged dollar books on Binance- now the same as on FTX and Coinbase – which is a good thing. USDC utility just increased. ”
He also tweeted that the change by Binance could trigger a “net share shift from USDT to BUSD and USDC,” which the CEO expects to occur over time.
Stablecoins are digital coins that are typically created to maintain stable prices. They support equivalent trading and are mainly popular among crypto investors.
USDC is the second largest stablecoin in market capitalization, holding a value of $52 million; TUSD and USDP have sixth and seventh positions in the total market cap, about $1 million or near, respectively.
In addition, the move will close the access for users of USDC-based denominated saving accounts, decentralized finance (DeFi) staking services, and loans.
Those who believe that is an undistinguished power grab have a different opinion. BUSD is a popular alternative for popular USD stablecoins. BUSD and USDC are both important cryptocurrencies that use scammer contracts to run on blockchain technology.
Both require no additional or outer support or legal authority to operate. Instead, these coins support fast transactions with the power of a bank or centralized system.
Who can benefit from the move?
The world’s largest crypto exchange platform announced the acceptance of the three critical stable coins USD coin (USDC), Pax dollar (USDP), and trueUSD (TUSD) into BUSD. BUSD is a popular stablecoin and the third-largest stablecoin by market capitalization.
BUSD is constantly growing its share volume since Binance conversion eliminated the trading fees for Bitcoin in its platform.
While those who are claiming its overt power that raises an arguable question and have a point. It’s hard to deny that BUSD is not already prevalent.
It’s a popular alternative coin to the dollar-pegged stablecoins. Undoubtedly, the move will improve the liquidity and currency flow on the exchange.
As a part of this Move, Binance conversion will now close the access of the USDC-denominated saving accounts, DeFi, and loans. The move will also influence the gradual net shift from USDT to BUSD, Allaire said in a tweet.
Meanwhile, there can also be particle disputes for the USDT traders who will manually convert the USDT into BUSD.
Conclusion
All of this sudden move raises questions about how beneficial this can be for the platform users. Binance conversion has introduced this new move to enhance liquidity. On the other hand, the action will cut USDC and other stablecoins trading volumes. If the Binance self-reported data is correct, it is ahead of its competitors.
FAQs
Q. Why is Binance stopping USDC?
Ans. Binance tweets that it is stopping the usage of USDC and a single coin BUSD usage from enhancing liquidity and cash flow.
Q. Did Binance convert USDC to BUSD?
Ans. Yes, from September, Binance converted all their stable coins into Binance’s stablecoin BUSD.
Q. Which is more stable, USDT or USDC?
Ans.While the USDT is more prevalent in transactions, USDC is safer because it has better central regulation and government control.
