Binance is today the largest cryptocurrency exchange in existence, so its influence on the market is equally enormous. Binance’s decision has not gone unnoticed. Since July, the cryptocurrency has been gradually losing value, and the trend has turned horizontal after the news broke.
For one thing, USDC will no longer participate in the larger market, but it can be purchased on other exchanges, as well as traded on different wallets, such as Guarda’s non-custodial USDC wallet. According to the company itself, this decision was made in order to improve the liquidity and efficiency of capital for its users by introducing the auto-conversion of BUSD (Binance Coin) for the balances of people who use the other stablecoins that were offered on the list, that is, USDC, USDP, and TUSD in a 1:1 ratio. The most accurate reading that can be made of this movement is that Binance intends to focus its efforts on promoting the purchase of its own dollar-pegged stablecoin, at the expense of the balance of the other stablecoins that used to be listed. Of course, the reactions would not wait.
Binance users criticized the move
Not only is Binance the largest crypto asset market in the world, and the largest exchange by far, but it is also home to BUSD, the third largest stablecoin in the market. Reactions from Binance users were clearly polarized, with one side applauding the decision, and the other harshly criticizing it.
The purpose for which this decision was made is more than clear, to increase the value of BUSD, at the expense of the value of cryptocurrencies such as USDC, which is in a fairly clear downward trend. Currently, the three largest stablecoins are Tether with a market cap of $67.59 billion, followed by USDC with $51.89 billion, and BUSD with a market cap of about $19.44 billion.
Binance dumps some cryptocurrency pairs
Another of Binance’s functions is the possibility of trading between cryptocurrencies, however, a large part of this market will be eliminated by the Exchange. This suspension was not as high-profile as the removal of stablecoins via automatic conversion. The major pairs removed are USDC/BUSD, USDC/USDT, USDP/BUSD, USDP/USDT, TUSD/BUSD, and TUSD/USDT.
In addition to this, Binance will suspend altcoin and stablecoin pairs including ADA/USDC, ATOM/USDC, AUD/USDC, BCH/USDC, BNB/USDC, BTC/USDC, EOS/USDC, and several others. The elimination of these pairs responds, of course, to the elimination of stablecoins. These changes in the Binance market could create a new collapse of stablecoins, as has happened in the past after the fall of algorithmic stablecoins, which unleashed a wave of mistrust in this type of cryptocurrency. Currently, in the middle of the recovery period of the crypto market, with Ethereum’s subsidiaries as the main flagship, BTC, meanwhile, maintains its downfall.
Binance received multiple criticisms for these decisions, since, despite being a movement clearly in favor of its own stablecoin, it is also true that it is one of the few stablecoins that have managed to remain truly stable, while others have lost a great part of its value with respect to the dollar and especially with respect to other cryptocurrencies, harming the liquidity of Binance itself and also of its users.