- Binance will no longer let rival stablecoins be traded on its exchange.
- USDC, Paxos’s Pax Dollar, and TrueUSD can now only be converted to Binance’s own stablecoin.
- The number of USDC stablecoins leaving the exchange has gone up by 93%. Binance will stop letting people trade $USDC on September 25.
Binance will no longer let rival stablecoins, like USDC, be traded on its exchange. Since the news came out, USDC’s market cap has gone down by 5%.
Circle’s USDC, Paxos’s Pax Dollar, and TrueUSD can now be converted to Binance’s own stablecoin, Binance USD. And the effects are already being felt on the stable-coin market.
Since Binance said it would stop supporting competing stablecoins on its exchange, which is the world’s largest by volume, the number of USDC stablecoins leaving the exchange, or “USDC outflows,” have gone up by 93%. The market cap of USDC has dropped by 5%.
Nansen, a blockchain analytics company, says that as of Wednesday afternoon, $26 billion worth of stablecoins were on Binance’s exchange. $20 billion of that was in BUSD, and the rest was in other stablecoins: $683 million in USDC, $48 million in USDP, and $283 million in TUSD.
Nansen said that $5 billion worth of Tether (USDT) was the only other large amount of a stable coin on Binance.
Users have been able to exchange their soon-to-be-delisted stablecoins for BUSD at a rate of 1:1 since Monday. A blog post says that starting tomorrow, any remaining USDC, USDP, and TUSD balances will be automatically converted to the exchange’s own stablecoin.
Even though Binance’s announcement mentioned three of its competitors, USDC has gotten most of the attention. It’s the second-biggest stablecoin in terms of market capitalization, and it’s always been bigger than BUSD.
Decrypt asked Binance and Circle, the company that makes USDC, for a comment, but neither of them answered. But exchange data still shows that the conversions have already changed the stablecoin landscape.
When Binance told people about the change at the beginning of the month, it caused a lot of trouble.
That’s because the crypto exchange is by far the largest by volume, having done $23 billion in transactions in the past day. When the news came out, a Twitter user named “BloodgoodBTC” compared it to a crypto monopoly, saying that the exchange was “deleting competitors like Google did 10 years ago.”
Binance will stop letting people trade $USDC on September 25 in order to get people to use $BUSD.
They also hired the former head of the Brazilian central bank as a consultant, because having connections with bankers is important. To do with rules.
Like Google did 10 years ago, Binance is getting rid of its competitors.
“Bitfinexed,” a vocal critic of Tether and Bitfinex, thought that the conversions should show a drop in the amount of USDC issued and a rise in the amount of BUSD issued.
Both Paxos and Circle are trying to keep their stablecoins at a 1:1 peg with the U.S. dollar. When coins are redeemed, Paxos burns them and Circle does the same. This means that their market capitalization can be used to estimate how many coins they have issued.
Binance needs to redeem the USDC and send the money to PAXOS to get BUSD issued before they can properly convert USDC to BUSD.
If they are telling the truth, the amount of USDC issued should go down while the amount of PAXOS issued should go up.
Right now, BUSD is just PAXOS.