On September 5, Binance explained that it planned to drop a number of usdc trading pairs and auto-convert specific stablecoin balances into busd by September 29. While the move was controversial among crypto proponents on social media, Circle Financial CEO Jeremy Allaire explained that the change “will likely lead to more usdc flowing to Binance.”
Circle’s Jeremy Allaire Thinks Binance’s Forced Stablecoin Conversions Will Likely Lead to More USDC Flowing to the Exchange
Circle’s CEO Jeremy Allaire spoke about Binance’s recent move to “enhance liquidity and capital-efficiency for users” by removing a number of stablecoin trading pairs and auto-converting USDC, USDP, and TUSD stablecoins at a 1:1 ratio to BUSD. Both Circle and Coinbase are the firms behind the Centre consortium, the issuer and custodian of usd coin (USDC) and euro coin (EUROC). Allaire believes the forced conversions have sparked a number of “misleading headlines and interpretations.”
Allaire further stressed that Binance is “not ending support for USDC, and [the] change will likely lead to more USDC flowing to Binance.” The Circle CEO noted that a trading platform unilaterally converting existing customer assets would not work in a regulated U.S. market, and he would not have handled the situation in this way. Allaire said that Binance is attempting to consolidate dollar liquidity using cash equivalent stables. He further remarked that Binance could not do the switch with tether (USDT), at least right now, as Allaire thinks it would be too disruptive. Allaire opined:
Binance is trying to consolidate dollar liquidity w cash equivalent stables. That’s good for liquidity and market depth. [Tether] is NOT cash equivalent — not even close. Binance can’t do this now / yet w [tether] as it would be too disruptive given current [tether] liquidity on Binance.
Trueusd Addresses Binance’s Auto Conversion Move — Paxos Says Decision Is a ‘Positive Step for the Safety of Its Customers’
In addition to Allaire’s commentary on Tuesday, Trueusd, the issuer of TUSD, tweeted about Binance’s decision as well. “TUSD will support Binance as always and have more cooperation with [the] Binance ecosystem,” the official Trueusd Twitter account wrote. “Binance will maintain multi-chain TUSD deposit and withdrawal support on their exchange for all the following token standards.” For his part, Allaire thinks that with Binance consolidating its dollar books, it will “now be easier and more attractive to move USDC to and from Binance for trading core markets.”
Paxos, the issuer of USDP, also chimed in on the conversation concerning Binance’s recent move toward liquidity consolidation. “Binance has made a positive step for the safety of its customers by pushing to support [BUSD primarily],” Paxos wrote on Tuesday. “Unlike competing stablecoins, BUSD is regulated by NYDFS which sets rules and monitors compliance with those rules.”
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What do you think about Jeremy Allaire, Trueusd, and Paxos addressing the decision Binance made concerning auto-converting specific stablecoin balances? Let us know what you think about this subject in the comments section below.
Jamie Redman
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