CEO Jeremy Allaire has addressed the speculations surrounding Binance’s delisting of its USDC stablecoin, claiming it to be a good thing.
Speculations Around Binance’s Decision
When Binance announced that it was removing USDC from its spot trading pairs and other offerings, speculations arose about the exchange abandoning the stablecoin. While Binance was merely converting USDC holdings to its own stablecoin BUSD, many interpreted the move as indicative of the exchange inching away from USDC to remove competition for its own stablecoin. Another school of thought was that Binance was preparing in advance for any regulatory shutdown that might stem from the U.S. government, as both the stablecoin’s issuers were U.S.-based.
Benefits USDC: CEO Claims
Since Circle is one of the two issuers of the USDC stablecoin, the opinions of its CEO Jeremy Allaire on this matter are highly relevant. In a Twitter thread, Allaire lists how the move could prove beneficial for USDC. Firstly, he denies claims that Binance is ending support for USDC. He also claimed that the move would bring in more USDC to the exchange. He explained that since Binance is trying to consolidate dollar liquidity with cash equivalent stables, it would be better for liquidity and market depth to move USDC to and from Binance for trading core markets. The move is meant to enhance liquidity and capital efficiency at the exchange by consolidating multiple dollar-equivalent cryptocurrencies around one asset.
He said,
“I am very confident in the long game we have played and are playing w USDC, and with Circle’s role as a NEUTRAL market infrastructure player.”
The Problem With USDT
The decision from Binance to convert all USDC to BUSD will not hamper users who want to withdraw their BUSD account balance as USDC. Furthermore, Allaire claimed that since BUSD still has limited usage outside Binance, the move will help USDC become the market’s preferred stablecoin rail for moving funds between centralized and decentralized exchanges.
He also explained why the same maneuver could not be implemented with the number one stablecoin, USDT.
He said,
“USDT is NOT cash equivalent — not even close. Binance can’t do this yet with USDT as it would be too disruptive given current USDT liquidity on Binance. With consolidated dollar books, it will now be easier and more attractive to move USDC to and from Binance for trading core markets.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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