Stablecoins certainly took the front stage this year. These assets are widely used in the market and particularly by those who wanted to employ crypto without falling prey to its volatility. However, things took a whole different turn when these stablecoins defied their ethos of being stable. Inflicted by Terra’s stablecoin, a whole bunch of stablecoins went on to lose their $1 peg temporarily. While TerraUSD continues to struggle the others seem to have attained some stability. Prominent crypto exchange, Binance was on a stablecoin take-down spree.
Earlier today, the Changpeng Zhao-led exchange announced that it would halt trading support for USD Coin [USDC], USDP Stablecoin [USDP], and TrueUSD [TUSD].
Binance noted that if users continued holding these assets beyond the aforementioned date, the exchange would convert them to BUSD. This came as surprise to many. But the exchange noted that this was done to spruce up liquidity as well as capital efficiency for its customers. It was also noted that this wasn’t a temporary initiative and would prolong.
However, the world’s largest stablecoin Tether [USDT] was left out of this mess. The exchange affirmed that there were no plans to auto-convert USDT to BUSD at the moment. However, it could very well change in the future. A Binance spokesperson reportedly said,
“We do not have plans to auto-convert USDT to BUSD as of now, but may change.”
While the community was glad that the exchange hadn’t involved Tether, it remained fearful about the uncertainty.
USDC on Binance dips below $1 billion
USDC grew into immense popularity over the last couple of months. The stablecoin managed to climb up the crypto ladder and currently stands as the fourth largest cryptocurrency. At press time, the asset’s market cap was at $51.80 billion while Tether was at $67.55 billion.
Following Binance’s announcement, USDC on Binance took a major hit. It seemed like users were already converting or taking out their USDC.
Additionally, it should be noted that Binance had converted a whopping $1.5 billion worth of USDC into BUSD since mid-August.
Amidst all of this, the scare around USDT’s existence on Binance continued to surface.