Binance to convert users' USDC into its own stablecoin

Coindesk said Binance effectively banished USDC from trading at its crypto exchange in favour of its own competing product. PHOTO: REUTERS

NEW YORK - Binance, the largest crypto exchange by volume, will start converting any existing user balances and new deposits of USD Coin (USDC), Pax Dollar (USDP) and True USD (TUSD) into the company's own stablecoin, according to a statement published on Monday.

The conversion is scheduled to begin on Sept 29.

Coindesk said Binance has effectively banished USDC, the second-biggest stablecoin after Tether (USDT), from trading at its crypto exchange in favour of its own competing product.

USDC, issued by Circle Internet Financial, has a market value of nearly US$52 billion (S$72.9 billion), according to data from CoinGecko. Binance's stablecoin, BUSD, is a distant third at around US$19.3 billion.

Customers transferring USDC, USDP or TUSD will have these automatically converted to BUSD, though they will be able to withdraw those other stablecoins when they remove money from Binance, said Coindesk.

The exchange said the move is intended to "to enhance liquidity and capital-efficiency for users". Binance will also remove and stop any trading on spot pairs that involve USDC, USDP or TUSD, the exchange said in the statement.

Current Binance-offered USDC products affected include crypto loans, which will be closed and liquidated as of Sept 23; USDC-denominated savings accounts; DeFi staking; and the USDC/USDT liquidity pool.

Circle did not immediately respond to a request for comment on the Binance announcement.

Stablecoins are cryptocurrencies that are pegged to a "stable" reserve asset like the United States dollar or gold. This is supposed to reduce their volatility relative to unpegged cryptocurrencies like Bitcoin. BLOOMBERG

Join ST's Telegram channel and get the latest breaking news delivered to you.