Binance market share could drop after abolishing most zero-fee trading, boosts TrueUSD stablecoin

  • Binance abolished zero-fee trading for Bitcoin and several asset pairs on March 22, only maintaining TrueUSD.
  • Zero-fee trading pairs represent around 60% of all trading volume on the platform.
  • The decision could foreshadow a major shift for CEXs, ending Binance's dominance. 

In a Wednesday announcement, Binance phased out almost all zero-fee buying and selling Bitcoin (BTC) along with multiple trading pairs from its platform after nine months. An exemption was allowed for the TrueUSD/Bitcoin (TUSD/BTC) pair. This built atop a March 10 move to quietly wind down BUSD auto-conversion and re-list the stablecoins de-listed in September.

While the decision highlights TUSD's status as the platform's preferred stablecoin, it could see the largest cryptocurrency exchange, by trading volume, lose some of its market share.

A threat to Binance exchange's supremacy

The move may indicate a major shift for centralized cryptocurrency exchanges (CEXs), ending Binance's position as the leading crypto platform. Notably, zero-fee trading pairs represent around 60% of the platform's total trading volume.

Binance introduced zero-fee trading for some Bitcoin pairs worldwide during the summer of 2022, earning a significant market share against industry rivals. Noteworthy, this was when exchanges struggled with low trading volumes and plummeting revenues.

The strategic move last summer was, therefore, instrumental in helping the giant exchange expand its market share by around 22% relative to many other liquid exchanges.

It is worth mentioning that despite Binance's reasons for curbing zero-fee trading for select pairs, the move could prove unsustainable for the exchange in the long run. This point stands despite its ability to earn the platform a huge market share in the short run. Accordingly, without zero fees for most Bitcoin pairs, experts predict an eventual drop in Binance's market share.

The advent of TrueUSD stablecoin

TrueUSD was spotlighted around February when regulators clamped down on Binance USD (BUSD) and its issuing firm Paxos. In the debacle, the New York Department of Financial Services (NYDFS) ordered Paxos to terminate its support for the stablecoin under the Binance exchange umbrella. As a result, the supply of BUSD plunged 50% from $16 billion to $8 billion.

With the latest move, therefore, Binance seems to have identified TUSD as a successor to BUSD, with the former's market capitalization soaring more than 50% since the announcement. At the time of writing, TrueUSD, managed by Archblock, is showing a market cap of $2.039 billion. Allegedly, Tron founder and cryptocurrency billionaire Justin Sun could be the figure behind TUSD.

Nevertheless, it remains premature to establish the extent Binance looks to pump TUSD as its platform's "de facto standard." Even so, making trading free is a formidable tool. Trading firm Folkvang founder Mike van Rossum has since commented on the matter, saying:

If people end up trusting TUSD – very uncertain right now – this zero-fee promo can easily grow into the biggest market by volume.

A Binance spokesperson has also commented that Binance's goal "right now is to identify a diverse set of stablecoin products to offer users, particularly products that are transparent, regulated, and have strong relationships with banking institutions in markets that support innovation."

The spokesperson also asserted that "TUSD is the first of what will hopefully be many new stablecoin products being offered to users."

These changes come after the stablecoin market endured turmoil in early March when multiple US banks closely affiliated with cryptocurrency firms closed down.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content

Recommended Content

Editors’ Picks

Solana congestion troubles could end soon, testnet v1.18.11 release arrives

Solana congestion troubles could end soon, testnet v1.18.11 release arrives

Solana network is plagued by failed transactions caused by congestion issues on the blockchain. The recent rise in popularity of Solana-based meme coins has resulted in a massive increase in user activity on the SOL blockchain, which has exacerbated the issue. 

More Solana News

Bitcoin meme coin PUPS hits new all-time high as Ordinals tokens see massive spike

Bitcoin meme coin PUPS hits new all-time high as Ordinals tokens see massive spike

Pups, a BTC-based meme coin, hit a new all-time high of $84.08 early on Friday. The Ordinals Inscription project, which was launched nearly a year ago, sees gains from anticipation surrounding Bitcoin halving.

More Bitcoin News

XRP price tests $0.60 support as AMM makes comeback on XRPLedger

XRP price tests $0.60 support as AMM makes comeback on XRPLedger

Ripple sees AMM back in action on the XRPLedger mainnet after amendment on Friday. XRP price tests $0.60 support, price ranges below $0.62 on April 12. Ripple CLO shared the Second Circuit Court of Appeals refusal to reconsider their decision, considered a loss for the SEC. 

More Ripple News

Robert Kiyosaki steers clear from ETFs, opts for holding Bitcoin directly instead

Robert Kiyosaki steers clear from ETFs, opts for holding Bitcoin directly instead

Robert Kiyosaki, author of Rich Dad Poor Dad, is popular for his investment advice and pro-Bitcoin stance on social media platform X. Early on Friday, Kiyosaki shared his thoughts on Bitcoin ETFs and advocated holding the asset directly, instead of a “Wall Street” version. 

More Cryptocurrencies News

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin (BTC) price has been hovering around the $70,000 psychological level for a few weeks, resulting in a rangebound movement. This development could lead to a massive liquidation on either side before a directional move is established. While Bitcoin’s long-term outlook remains positive, bouts of volatility could bring prices down ahead of the upcoming halving.

Read full analysis