On September 5th, Binance explained that it planned to drop several USDC trading pairs by September 29 and convert specific stablecoin balances to BUSD. Although the move was controversial among crypto proponents on social media, Circle Financial CEO Jeremy Allaire explained that the change is “likely to have more USDC flowing into Binance.”
Circle’s Jeremy Allier thinks Binance’s forced stablecoin conversion is likely to cause more USDC to flow into exchanges
CEO of Circle Jeremy Allier Binance talked about recent moves “to increase liquidity and capital-efficiency for users”, by removing multiple stablecoin trading pairs and automatically converting USDC, USDP and TUSD stablecoins to BUSD in a 1:1 ratio . Both Circle and Coinbase are the firms behind the Center Consortium, the issuer and custodian of the USD Coin (USDC) and the Euro Coin (EUROC). allaire believe that Forced conversion has given rise to many “misleading headlines and interpretations”.
Allaire further emphasized that Binance is “not ending support for USDC, and [the] The change is likely to lead to more USDC flowing into Binance.” Circle CEO noted That a trading platform unilaterally converting existing client assets would not operate in a regulated US market, and would not have handled the situation as such. Allaire said that Binance is attempting to strengthen dollar liquidity by using cash equivalent stablecoins. He further commented that Binance cannot switch with Tether (USDT), at least for now, as Allaire thinks it will be too disruptive. allaire did not vote,
Binance is trying to strengthen dollar liquidity w cash equivalent stables. This is good for liquidity and market depth. [Tether] There is no cash equivalent – not even close. Binance can’t do this now/yet w [tether] because it would be very disruptive given the current [tether] Liquidity on Binance.
Trussed addresses Binance’s auto conversion move – Paxos says the decision is a ‘positive step to protect its customers’.
In addition to Allaire’s comments on Tuesday, TUSD issuer Trussd also tweeted about Binance’s decision. “TUD will support Binance as usual and have more cooperation with [the] Binance Ecosystem,” Official Trueusd Twitter Account wrote, “Binance will maintain multi-chain TUSD deposit and withdrawal support on its exchange for all the following token standards.” For his part, Allaire believes that with Binance strengthening its dollar book, “it will now be easier and more attractive to move USDC to and from Binance to trade in key markets.”
USDP issuer Paxos also noted recent conversations related to Binance’s move towards liquidity consolidation. “Binance has taken a positive step to protect its customers by emphasizing support [BUSD primarily]”Paxos wrote on Tuesday. “Unlike competing stablecoins, BUSD is regulated by the NYDFS which sets the rules and oversees compliance with those rules.”
What do you think about Jeremy Allaire, Trussed and Paxos addressing Binance’s decision to automatically convert specific stablecoin balances? Let us know what you think about this topic in the comment section below.
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