Binance, the world’s largest crypto exchange, said on Monday it will automatically convert user balances and new deposits of the stablecoins USD Coin, Pax Dollar and True USD into its own stablecoin, Binance USD. The move is intended to enhance liquidity and capital efficiency for users, Binance said in a statement.
Stablecoins are a type of cryptocurrency designed to maintain a constant value, for example through a 1:1 U.S. dollar peg. They play a crucial role in facilitating crypto trading, and allow traders to store idle crypto cash without converting it back into fiat currency.
Binance said it will stop trading on spot pairs which include USD Coin, Pax Dollar and True USD, although users will still be able to withdraw funds in the form of these stablecoins. USD Coin (USDC) is issued by U.S. firm Circle and is the world’s second-largest stablecoin, with a market capitalisation of $51.8 billion, according to crypto data provider CoinGecko. Binance’s stablecoin (BUSD) is valued at about $19.4 billion, according to CoinGecko.
USDC products affected include saving accounts, DeFi staking subscriptions and crypto loans, which will be closed and liquidated on Sept. 23, Binance said. Jeremy Allaire, the CEO of Circle, said in a tweet that “converged dollar books on Binance is a good thing. USDC utility just increased.” In another tweet, Allaire said he predicts the move will lead to USD Coin and Binance USD gaining market share from the world’s largest stablecoin, Tether.
Going by Binance’s website, it is a cryptocurrency exchange which is reportedly the largest exchange in the world in terms of trading volume of cryptocurrencies. Founded in 2017, it is registered in the Cayman Islands. The exchange was founded by Changpeng Zhao.