Binance said on Monday, Sept 5, that it would no longer enable the usage of fiat-collateralised stablecoins $USDC, $USDP, and $TUSD for trading. Instead, existing user balances and new deposits will be automatically converted to $BUSD at 1:1.
According to Binance’s blog post on Sept 5, as of 2022-09-29 03:00 (UTC), users will trade with a consolidated BUSD balance on Binance that reflects their balances of these four stablecoins (BUSD, USDC, USDP, and TUSD) following conversion.
#Binance to Auto-Convert $USDC, $USDP, $TUSD to #BUSD (Binance USD).
— Binance (@binance) September 5, 2022
Binance states on the FAQ page for this new function that it has added the stablecoin Auto-Conversion solution to provide better trading liquidity and user experience.
The leading exchange by trading volume said that this would have no impact on the withdrawal options available to users: 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.
The following are the principal ramifications of this news for spot trading:
At 3:00 UTC, 2022-09-26, Binance will delete and suspend trading on the following spot trading pairs: USDC/BUSD, TUSD/BUSD, USDC/USDT, USDP/USDT, USDP/BUSD, and TUSD/USDT.
At 03:00 (UTC), 2022-09-29, Binance will remove and halt trading on the following spot trading pairs: ADA/USDC, ATOM/USDC, AUD/USDC, ETH/USDC, BTTC/USDC, EOS/USDC, BCH/USDC, BTC/TUSD, BTC/USDC, BNB/USDC, LINK/USDC, LTC/USDC, SOL/USDC, TRX/USDC, XRP/USDC, ZEC/USDC, XRP/USDC, WIN/USDC, and BNB/USDP.
Once the conversion is complete, users can check their USDC, USDP, and TUSD amounts under the BUSD-denominated account balance.
All pending trade orders will be deleted immediately after trading finishes for each trading pair. The assets can then be traded using the corresponding BUSD trading pairs.
CoinDesk anticipates the following effects of this news on the stablecoin market:
The ruling essentially removes the second-largest stablecoin, USDC, from one of the most prominent positions in crypto, building a barrier to surpassing Tether (USDT) as the largest stablecoin. The 68 billion dollar market value of USDT surpasses the 52 billion dollar market value of USDC, with BUSD in third place at 19 billion dollars. USDP and TUSD are significantly smaller.