Seemingly working through every permutation possible, Binance has added new trading pairs for dollar-backed stablecoins including PAX:TUSD, USDC:TUSD, and USDC:PAX.
The additional pairs offer traders more flexibility, allowing them to move between trading fairs more easily (skipping an additional step and saving fees). While it appears liquidity may be fragmented, market-makers capable of redeeming any stable-coin for fiat should be ready to step in, especially as aggregate stablecoin issuances are in the hundreds of millions.
This move also serves as an escape valve for arbitrageurs: if an exchange offers a fiat-coin at a slight rebate, potentially to incentivize liquidity providers, someone would be able to more readily arbitrage the price difference at Binance. To date, limited trading of stablecoin pairs have allowed spreads to grow. More offerings like Binance's should allow the market to quell some of the uncertainties around liquidity and credit risk.
More and more, cryptocurrency market microstructure resembles more traditional capital markets, like FX. Surely some traders are wondering: when can we lever up our stablecoin trading?