A Binance USDC removal is set to happen later this month with Binance converting all USDC into its own stablecoin.
The said move will automatically convert USDC, USDP, and TUSD stablecoins into BUSD, although with some caveats.
Binance is known for its constant new features and experiments, whether the Binance Crypto Wodl or the many Binance Learn and Earn quizzes. However, this one might be slightly more controversial.
Binance will auto-convert USDC into its own BUSD stablecoin
In an announcement on September 6, Binance said it is set to introduce an auto conversion feature on its platform.
The new feature will automatically convert the existing users' account balances of USDC, Pax Dollar USDP, and TrueUSD or TUSD to Binance USD stablecoin based on a 1:1 ratio. It said:
"Existing USDC, USDP, and TUSD balances in user accounts will be automatically converted to BUSD at 2022-09-29 03:00. All users will be able to see the converted balance on their accounts within 24 hours.
The conversion will come into effect from September 29, and intends to enhance the liquidity and capital efficiency on the platform. Essentially, with too many pairings, it can fracture liquidity and create slippage issues.
Binance further states that the auto conversion feature will also benefit users across the board. The exchange also notes that the users will still be able to withdraw their separate stablecoins holdings from their converted BUSD holdings if they wish to proceed ahead with the withdrawals.
Adding to the Binance delistings, the exchange will also remove spot trading pairs associated with the stablecoins such as USDC/BUSD, USDC/USDT, USDP/BUSD, USDP/USDT, TUSD/BUSD, and TUSD/USDT.
Binance will also cease spot trading on the above-mentioned trading pairs starting on 23 September 2022.
Per a report issued by CoinTelegraph, Binance has further clarified its stance on auto converting USDT. Binance said it has no plans to convert Tether stablecoin into BUSD as of now, adding that the decision may change in the future depending on various circumstances.
Auto conversion criticism
The new auto conversion feature launched by Binance has garnered some from several crypto enthusiasts.
One user described it as "crypto monopoly 101", implying the move was done to eliminate competition. It was also mocked by the Web 3 Is Going Great account for the decision.
However, others noted that there is a misunderstanding among the community about this move, which has been done mainly to improve liquidity on pairings - a decision other exchanges also have made.
"Binance will internally pool up all BUSD, USDC, USDP and whatever, and call that ”BUSD” on the platform. You can still move the stables on and off in supported flavours of stables," one Redditor posted.