9/6/2022: Binance is Canceling USDC
USDC, USDP and TUSD would be automatically converted into BUSD on 9/29/2022
Binance said on Monday that it will convert all investments in USDC, USDP and TUSD into Binance’s stable coin BUSD on Sept. 29. Customers transferring those tokens to the exchange will see them automatically converted into BUSD after that date. However, customers will be able to withdraw money denominated in USDC, USDP or TUSD when removing money from Binance.
Basically, Binance is canceling USDC and consolidating its crypto trading into USDC and USDT. Most of the stable coin volume on Binance is on USDT, BUSD and USDC. The other two stable coins mentioned in the press release have very thin volume. This move will increase BUSD’s trading volume by at least 10% by absorbing USDC volume. It’s pretty obvious that Binance wants to promote its own stable coin and demote USDC. It makes sense from the business perspective. They are also asserting that BUSD, TUSD, USDC and USDP are interchangeable and each coin is firmly pegged to a US dollar.
Interestingly, USDT is not included in this announcement. I suppose Binance is telling us that USDT is not interchangeable with other higher quality stable coins. (What a surprise!! ) Namely, USDT is worth less and they don’t want to blindly convert USDT to other stables on a one to one basis. I wonder if Binance’s long term plan is to pull away from USDT as USDT is potentially insolvent and it’s playing with fire by going against the OFAC. If Binance can shift most of the trading volume into BUSD, they might be able to cancel USDT eventually. By disassociating with USDT, I believe it will help legitimize Binance. But I suppose they would either ask USDT holders to transfer out their coins or convert it to other stables at the market price which is probably less than $1.