The largest cryptocurrency exchange in the world, Binance has announced that it will auto-convert USDC, USDP, and TUSD to Binance USD. The exchange will convert the current balances of users and new stablecoin deposits into its own stablecoin. According to its official announcement, Binance has taken this step to enhance liquidity and capital efficiency for users.
Moreover, USDC, USDP, and TUSD will be converted at a 1:1 ratio, and the conversion will be put into effect from September 29. These users will trade with a consolidated BUSD balance. The consolidated balance will comprise the four stablecoins after conversion. Nonetheless, users will have the liberty of withdrawing funds in USDC, USDP, and TUSD to their BUSD account balance.
Binance Aims to Expand its Market Share
Binance USD is one of the most prominent stablecoins in the crypto realm. The market cap of BUSD is over $19.4 billion. Whereas USDC has a market cap of $51.8 billion. Tether (USDT) maintains its position as the top stablecoin in the market. However, Binance is planning to make a move and rise in the popularity charts of stablecoins.
Binance’s new decision will impact USDC products in saving accounts, crypto loans, and DeFi staking subscriptions. All of these products will be liquidated on September 23, and the pending trade orders will be canceled. A spokesperson from USDC issuer, Circle, said that the decision might optimize dollar liquidity but it will raise concerns over market conduct.
On the other hand, the CEO of Circle, Jeremy Allaire says that it will increase the utility of USDC. He also believes that this step will help USDC and BUSD to gain market share from USDT in the longer run. However, it is yet to be seen in the coming weeks if the decision helps in the growth of both stablecoins or not.
Binance announced that the minimum amount for conversion will be 1 USDC, USDP, or TUSD. Users will not have to do anything for the automated conversion. However, the exchange may also amend the list of eligible stablecoins. Additionally, Binance will remove the spot trading pairs of USDC/BUSD, USDC/USDT, USDP/BUSD, USDP/USDT, TUSD/BUSD, and TUSD/USDT on September 29. The exchange also advised users against adding positions during the conversion period.