- Circle boss Jeremy Allaire has denied that Binance is ditching USDC
- Binance announced this week that USDC deposits would be auto-converted to BUSD
- Allaire said that the auto-conversion feature would see more USDC flowing to the exchange
Circle boss Jeremy Allaire has denied suggestions that Binance is delisting its USDC stablecoin, and has instead insisted that the exchange’s move will benefit the coin. Binance announced this week that it would be converting USDC, TUSD and USDP into its own BUSD coin in order to “enhance liquidity and capital-efficiency for users”, with many interpreting this as a rejection of USDC. However, Allaire says that Binance’s move will make USDC the “preferred cross CEX and DEX stablecoin rail”, while taking a dig at USDT at the same time.
Binance Will Auto-convert USDC to BUSD
There was some confusion in the crypto space yesterday over Binance’s decision to auto-convert three stablecoins into its BUSD stablecoin, with the general consensus being that USDC would no longer have any trading pairs. This would essentially amount to it playing no part in the Binance ecosystem. With so many trading pairs between so many stablecoins, the move made sense, with the trading volume diluted between, say, BTC and four to five stablecoins.
Binance’s move means that each coin will now be tradeable against only two stablecoins, USDT and BUSD, and Allaire took to Twitter yesterday to explain how, in his mind, it would lead to more USDC going into Binance:
Sharing some perspective on Binance forced conversion of USDC. Lots of misleading headlines and interpretations. Binance is not ending support for USDC, and change will likely lead to more USDC flowing to Binance. Here’s why. 1/
— Jeremy Allaire (@jerallaire) September 6, 2022
Allaire claimed that “Binance is not ending support for USDC”, which is true, and blamed the suggestion on “misleading headlines and interpretations”. Allaire noted that Binance’s move would not be allowed in a regulated U.S. environment, but admitted that it was “good for liquidity and market depth.” He also had a sly dig at Tether, saying that “USDT is NOT cash equivalent — not even close” and that Binance couldn’t replicate its move with Tether because of the amount of USDT liquidity on the exchange.
USDC Relegation Could Halt Challenge to Tether
Allaire added that it will now be “easier and more attractive to move USDC to and from Binance for trading core markets”, adding that he was “very confident in the long game we have played and are playing w USDC, and with Circle’s role as a NEUTRAL market infrastructure player.”
While additional liquidity may be a bonus of Binance’s move, it can’t be ignored that, from a branding perspective at least, to not have a USDC-specific pair is a blow. USDC was positioning itself as a legitimate competitor to USDT, but now it has been lumped in with all the other non-Tether stablecoins on Binance and will not appear in its own right, we may see this challenge weakened somewhat.