Binance, the world’s largest crypto exchange based on volumes, has decided to discontinue the support of several stablecoins.
The crypto exchange announced earlier today that it will auto-convert “existing balances and new deposits of USDC, USDP and TUSD stablecoins at a 1:1 ratio” to BUSD, with effect from 2022-09-29 03:00 (UTC). Users will still be able to withdraw these stablecoins.
According to the company, the move will help in enhancing liquidity and capital efficiency for its users.
This effectively removes Circle’s USDC – the second largest stablecoin by marketcap at almost $52 billion, according to Coinmarketcap data – from the exchange.
USDC has been long in contention to overtake Tether (USDT) as the world’s largest stablecoin.
The banish by the largest cryptocurrency exchange would surely take some momentum off the stablecoin and might create unfavorable conditions for Circle, which has been long mulling an IPO.
TUSD and USDP, the other two stablecoins, rank fifth and sixth among the largest stablecoins with a marketcap cap of $1 billion and $945 million, respectively.
Binance’s own stablecoin BUSD sits just behind USDC as the third largest stablecoin with a marketcap of nearly $20 billion.
It’s still unknown why USDT, which has a marketcap of $67 billion and a 44% market share, was spared.
The community has reacted with some skepticism to the news as it became quite evident that Binance is trying to strengthen its own stablecoin by pushing out rivals.
The surprise move comes at a time when Binance is caught amidst a price war with rival exchange Coinbase, which is known for charging high fees.