The stablecoin market is heating up again, with Binance announcing that it will convert users’ USDC, USDP, and TUSD holdings into its own stablecoin BUSD, beginning 29 September.
The move is intended to increase liquidity and capital efficiency for users, while the tokens in question transferred by users will automatically be converted to BUSD tokens, according to the release. However, the decision has left crypto enthusiasts confused. They doubt if the move was required and fear that this will affect user autonomy over their holdings.
But this will not affect users’ choice of withdrawal: Users will still be able to withdraw funds in USDC, USDP, and TUSD at a 1:1 ratio to their BUSD-denominated account balance, the blog post said.
BUSD is the third largest stablecoin with a total market cap of $19 billion, after USDT and USDC. USDP and TUSD are much smaller stablecoins with a market cap of nearly $1 billion each.
Three days after ending support, the platform will also disable crypto pairs related to USDC, USDP, and TUSD.
In August, the on-chain metrics showed a 33% increase in stablecoin volumes to $866 billion, compared to $655 billion recorded in the previous month. Also, Curve Finance announced the launch of its own dollar-pegged stablecoin crvUSD in September, which will be an over-collaterized stablecoin, a type of stablecoin backed by excess collateral.
