Cryptocurrency exchange platform Binance announced that it would begin converting US Dollar Coin (USDC) into Binance US Dollar (BUSD) starting September 29, 2022. Binance assures that the conversion will be a 1:1 ratio for all holders of USDC and its trading pairs. The BUSD Auto-Conversion will also include USDP and TUSD, both getting a 1:1 exchange. The conversion will also include Margin and Futures trades that use USDC, USDP, and TUSD.
The sudden announcement did not come with an explanation as to why Binance was terminating the use of USDC. However, the crypto community has been discussing rumors, such as weakening its rival, Coinbase, because top investment company BlackRock supports the stablecoin.
USDC is the second largest pegged stablecoin by the Centre consortium and was established by Circle and Coinbase in 2018.
All USDC Trading Pairs will Convert into BUSD
Binance users with USDC in their portfolio do not need to exchange themselves manually. The app will automatically do that for them, although the exchange elaborately stated that nobody should make USDC trades on September 29 at 3 am UTC to avoid potential losses. Binance will not be held accountable if users defy their advice during the period.
The app will also stop all services for USDC Flexible Savings, and DeFi Staking subscriptions on September 23 at 3 am UTC. “All USDC subscribed to Flexible Savings, and DeFi Staking will be automatically redeemed and deposited into users’ spot wallets on the same day,” the blog says.
Same day as the ceasing of Flexible Savings and DeFi staking, the USDC/USDT liquidity pool will stop on the 23rd as well.
“Binance Liquid Swap will close the USDC/USDT liquidity pool and automatically redeem all users’ assets from the USDC/USDT liquidity pool to their spot wallets at 2022-09-23 03:00 (UTC). If you wish to redeem your assets manually, you can do so before the automatic redemption.”
According to the website, the following pairs will be converted:
The following steps are according to Binance’s asset conversion process for USDC, USDP, and TUSD:
- All balances that include USDC, USDP, and TUSD will automatically convert to BUSD “BUSD at 2022-09-29 03:00 (UTC)”
- Users can still manually convert them before September 29 but must do so via Binance Convert on September 26, 3 am UTC.
- The minimum amount is 1 USDC, USDP, or TUSD. All conversions will be 1:1.
- Binance may still amend the stablecoin list for the conversion period.
Rumors Linger in Social Media
The vague announcement brought crypto enthusiasts to express their perspectives on why Binance would decide such a thing. According to one of them, Tajo Crypto, the conversion will “enhance liquidity and capital-efficiency for users, But the new development will not affect the withdrawal of these stablecoins.”
However, some thought Binance wanted to minimize the competition and monopolize the crypto market. In contrast, others defend the app, stating that Binance intends to avoid another potential rug pull like what happened to the Terra US Dollar (UST).
The news is neither good nor bad, but it depends on how users view USDC and BUSD. Chaopeng Zhao, the CEO of Binance, has not said a word as to why the exchange platform decided to do so, but perhaps he will provide a full explanation soon on social media.