The world’s largest cryptocurrency trading platform by trade volume, Binance has recently taken a decisive decision on the USDC stablecoin listed on its exchange. On Monday the 5th of September 2022, Binance released a publication stating the plan of the exchange to remove the stablecoin USDC from the platform’s trading pair on the 29th of September 2022.
In their issued statement titled “Binance to Auto-convert USDC, USDP, TUSD to BUSD”, Binance added that two other stablecoins, PAX Dollar (USDP) and TrueUSD (TUSD) trading pairs will be removed and customers who don’t transfer their assets in this stable coin will see their asset automatically converted to the Binance issued stablecoin BUSD.
While elaborating on this in the publication, Binance stated that the main purpose of this action is to enhance liquidity and capital efficiency for users. It further assured its customers that the conversion will be at a 1:1 ratio and their worth in these stablecoins will be the same after it has been converted to BUSD. The statement reads:
“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 further added that this action will not affect users’ choice of withdrawal as customers can continue to convert their funds in USDC, USDP, and TUSD to BUSD at a 1:1 ratio.
Explaining and scheduling the conversion processes, the publication stated that users can convert their USDC, USDP or TUSD balances to BUSD manually at a 1:1 ratio before the auto conversion on Binance convert from “2022-09-26 03:00 (UTC) until 2022-09-29 03:00 (UTC).” This conversion is a one-way conversion and cannot be reversed. Still, on the manual conversion, customers who have less than 1 USDC, USDP or TUSD will not be able to convert their assets manually. They have to wait for the auto-conversion. The least amount that can be converted manually is 1.
For users that are unable to convert their asset manually until “2022-09-29 03:00 (UTC)”, the auto-conversion protocol will convert it for them.
To further implement this action, starting on “2022-09-29 03:00 (UTC)”, Binance will remove all spot trading pair options with USDC, USDP and TUSD and all pending trading orders will be removed automatically. For futures and derivatives, Binance will no longer support new deposits of USDC as margin assets starting from “2022-09-07 03:00 (UTC).”
USDC, USDP and TUSD will no longer be transacted in other services provided by Binance. Services such as Binance Gift Card, Binance Pay, Crypto loans, liquid swap, savings and staking and Binance convert.
Reacting to this, the CEO of the company that issued USDC Circle Internet Finance, Jeremy Allaire in his tweet described this as a “forced conversion of USDC.” He also stated that the decision of Binance to unilaterally convert existing customers’ assets wouldn’t fly for a regulated market in the US, and he wouldn’t have handled it that way. He further explained that Binance is trying to consolidate dollar liquidity with cash equivalent stables and that is good for the health of the market. With optimism, he added that this action by Binance will benefit USDC usage as the preferred cross CEX and DEX stablecoin rail. Unless Binance can convince all their competitors to get behind BUSD which he said to be unlikely because BUSD has a limited usage outside Binance.
To clear the air and explain the company’s action, CZ, Binance’s CEO replied to a now deleted tweet. In his reply, CZ tweeted that the company is not delisting these stablecoins and that the company is just merging all its liquidity into one pair which is BUSD.
Are these stablecoins delisted since they will no longer be available on the platform or are they merged as claimed by CZ?
