Binance to begin auto converting users’ USDC into BUSD

Binance, the world’s largest cryptocurrency exchange, is seemingly coming up with creative ways to eliminate its competitors. The issuer of the third biggest stablecoin in the world, the Binance USD (BUSD), has set its target on three stablecoins, including USD Coin (USDC).

BUSD to gain prominence over USDC?

In an announcement on Monday, Binance stated that starting September 29, the entire existing balance of USDC (USD Coin), USDP (Pax Dollar) and TUSD (TrueUSD), as well as any new deposits of the same, will be automatically converted into BUSD (Binance USD). This conversion will be conducted at a 1:1 ratio since all these assets maintain a $1 peg with minor fluctuations.

However, Binance also clarified that this would not affect the withdrawal as users can choose to withdraw their money in the form of USDC, USDP and TUSD. This move has been taken by Binance to not only “enhance liquidity and capital efficiency” for its users but also to capitalize on the declining performance of USDC, its closest rival.

For this reason, the crypto exchange will be ceasing the trading of more than 25 assets with the pairing of any of the stablecoins mentioned above. Binance also mentioned that these three stablecoins are on their target, for now, however, this list could see the addition or reduction of assets in the future.

The stablecoins war

In the crypto market today, there are only five major coins that dominate more than 97% of the stablecoin market, and in the last 12 months, the dynamics of their domination have changed considerably.

Tether (USDT) leads the space with a market cap of over $64 billion, followed by USDC’s $43 billion market capitalization. Third on the list is BUSD, with a circulation valued at $19.4 billion, with USDP and TUSD following with a market cap under a million dollars.

Centralized Stablecoins Market Cap

Back in August 2021, USDT had a domination of 63%, with USDC and BUSD holding 24% and 11.3% of the market. In the following 12 months, USDT lost about 13% of this domination which was taken over by USDC and BUSD, standing at 33.5% and 15.1%, respectively.

Centralized Stablecoins Market Cap

While USDC took advantage of the USDT decline, BUSD will do the same with USDC, which has lost more than $3 billion in the last three months, while BUSD has gained almost $3 billion in the same duration. This move by Binance is a step in propagating the same further.