Binance to hold back from supporting USDC; to convert user holdings to BinanceUSD(BUSD)

Changpeng Zhao Binance CEO

Binance, the world’s third-largest stablecoin issuer, announced on Monday that it will convert customer holdings in three rival stablecoins, USD Coin (USDC), Pax Dollar (USDP) and True USD (TUSD) into its stablecoin (BUSD) on September 29 to “improve liquidity and capital efficiency for users” in a move that has baffled many enthusiasts.

As a result of this move, the largest cryptocurrency exchange in the world quoted it will remove spot, future, and margin trading with USDC, USDP and TUSD pairs.

Binance quoted, “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.”

Circle spokesperson quoted, “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.”

USDC is the second largest stablecoin with a market capitalization of over $50 Bn. Stablecoin is used in over $5.5 Bn worth of transactions per day, according to data from CoinMarketCap. It’s a $9 Bn firm that counts BlackRock, Fidelity, FTX and Accel among its backers.

BUSD, Binance’s stablecoin, currently has a market cap of $19.3 Bn. According to CoinMarketCap, its daily trading volume has increased by more than 56% to over $6.5 Bn.

Subscribe to our Newsletter!

Get the latest on the Startup ecosystem delivered to you every day. Made for the Smart and Ambitious.