To “enhance liquidity and capital-efficiency for users,” Binance, the creator of the third-largest stablecoin in the world, announced on Monday that it will, on September 29, convert customer holdings in three competing stablecoins, USD Coin (USDC), Pax Dollar (USDP), and True USD (TUSD), into its own stablecoin (BUSD).
The largest cryptocurrency exchange in the world said that it will discontinue spot, future, and margin trading for USDC, USDP, and TUSD pairs as a result of the adjustment. The company, however, makes claims it will still allow its users to withdraw their earnings in their preferred coin.
“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,” stated Binance in a blog post.
According to Circle, a $9 billion firm that counts BlackRock, Fidelity, FTX and Accel among its backers, USDC is the second-largest stablecoin with a market cap of over $50 billion. According to data from CoinMarketCap, the stablecoin is utilized in transactions valued over $5.5 billion every day.
The market capitalization of BUSD, Binance’s stablecoin, is now valued at $19.3 billion. CoinMarketCap estimates that the coin’s daily volume trades have increased by over 56% to over $6.5 billion as a result of the announcement.
“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,” a Circle spokesperson said.
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