Binance is moving to prioritize its own stablecoin, BUSD, over several others on its cryptocurrency exchange.
The company announced Monday a "BUSD Auto-Conversion" that will start on Sept. 29 to "enhance liquidity and capital-efficiency for users."
Binance is introducing the conversion for users' existing balances and new deposits of USDC, USDP and TUSD stablecoins at a 1:1 ratio. USDC is the second-largest stablecoin by total supply, and the USDC/USDT pair saw the 11th highest volume on Binance in the last 24 hours.
"With effect from 2022-09-29 03:00 (UTC), users will trade with a consolidated BUSD balance on the Binance Platform that reflects their balances of these four stablecoins (BUSD, USDC, USDP and TUSD) post conversion. This will not affect users' choice of withdrawal: users will continue to be able to withdraw funds in USDC, USDP and TUSD at a 1:1 ratio to their BUSD denominated account balance," the company said.
Binance will also end trading pairs for the three stablecoins against BUSD and Tether (USDT) as well as major cryptocurrencies like bitcoin and ether. The stablecoin-to-stablecoin pairs will close on Sept. 26, with the stablecoin-to-crypto pairs ending on the 29th.
"All pending trade orders will be automatically removed after trading ceases in each respective trading pair. Users can then trade the assets in the respective BUSD trading pairs," Binance said. The announced changes cut across a number of Binance services beyond its exchange, including its staking, payment and gift card offerings.
The result of the decision means Binance, the world's largest crypto exchange by volume, will prioritize the use of its stablecoin above other market contenders. The announcement may also signal a push by Binance to expand the market share for BUSD.
The long-term implications for the affected stablecoins remain to be seen, though USDC's wider user across centralized exchanges as well as DeFi platforms could limit the impact on that particular token. Binance hosts the second-most voluminous trading pair for USDC against USDT, with $124.4 million in trade volume in the past day. That's out of a total of about $5.8 billion in 24-hour volume, according to CoinGecko data.
USDC also saw the most on-chain activity, according to The Block's Data Dashboard. BUSD, the third-largest stablecoin by total supply, saw $20.64 billion in on-chain volume last month compared to USDC's $352.6 billion.
Binance's TUSD/USDT is the third-largest trading pair for TrueUSD's stablecoin, with $12.6 million in reported 24-hour volume out of a total of about $185 million.
The USDP/BUSD trading pair on Binance is third-most voluminous for Pax Dollar, per CoinGecko, accounting for about $342,000 out of $2.6 million in the past 24 hours.
BUSD was launched in partnership with Paxos, the company behind USDP, in 2019. New York's Department of Financial Services drew headlines at the time for granting Paxos approval to issue BUSD on the Ethereum blockchain.
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