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Interpretation of Binance's automatic conversion to BUSD: join hands to combat USDT

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This is not the "delisting" of USDC, but USDT has taken another big step in the direction of losing to the stablecoin in the United States.

Original author: Evgeny Gaevoy

Original compilation: 0x9F, BlockBeats

Yesterday, Binance officially announced that in order to improve users’ liquidity and capital utilization efficiency, Binance will USDC, USDP, TUSD Stablecoin balances and new deposits will be automatically converted to BUSD at a ratio of 1:1. Wintermute CEO Evgeny Gaevoy believes that most of the news did not correctly reveal the impact of this incident on USDC, and made the following 4 clarifications, which are translated by BlockBeats as follows:

1

Elimination of most Stablecoin trading pairs is a good thing, it frees liquidity from having to be split across multiple Stablecoins, market makers will have an easier job, and the market will generally be more liquid.

2

This is good for USDC (and TUSD and others), users should still be able to seamlessly deposit USDC into and out of Binance. Before this change, users needed to convert USDC to BUSD or USDT to pay the margin of the perpetual contract.

Users can now skip the redemption step (pay the deposit directly in BUSD). This provides a better user experience while maintaining the usefulness of USDC (even more useful in my opinion).

3

Obviously there is one stablecoin out of scope, and that is USDT. This is not good for USDT, customers will always wonder what makes USDT so "special" that they need to go to the trouble of exchanging. In the long run, the liquidity of non-USDT trading pairs will increase.

Ultimately, USDT will keep losing ground until it has to improve operational efficiency (minting and burning are A T+1 process, not nearly instant like USDC/BUSD/TUSD), and the cost of minting and redemption.

The former is likely not controlled by Tether, Silvergate and Signature are unlikely to serve Tether ( Because US regulators hate it), and these two banks are where the most USD fiat flows 24/7.

As for the latter, any market maker can mint and redeem BUSD in seconds /USDC, no need for Binance to do this. Now, everyone can use this little market maker trick. FTX has been doing the same thing.

4

To sum up: this is not the "delisting" of USDC, but USDT has taken another big step in the direction of losing to the stablecoin in the United States.

In addition, Circle CEO Jeremy Allaire echoed Evgeny Gaevoy's views on social media , believes that this will increase the utility of USDC, and predicts that the market share of USDT will gradually transfer to BUSD and USDC.