Connect with us


Binance Dumps USDC for a New Stablecoin, Says Coinbase CEO



Binance Coinbase

Binance, the world’s largest cryptocurrency exchange by trading volume, has been shifting its stablecoin reserves from USDC to other alternatives, according to Coinbase CEO Brian Armstrong. During the company’s second-quarter earnings calls, Armstrong revealed that Binance moved some of its funds from USDC, the second-largest stablecoin by market cap, to another stablecoin. 

He did not specify which one, but he said that USDC’s market cap has held up despite the move. USDC is a dollar-pegged stablecoin issued by a consortium of companies, including Coinbase and Circle. It is widely used as a medium of exchange and a store of value in the crypto space. 

Binance Stablecoin Strategy Has Been Successful So Far

Binance once held a significant amount of USDC reserves, but it seems that the exchange has been diversifying its stablecoin portfolio. In September 2022, Binance announced that it would automatically convert all user-held USDC on its platform to Binance USD (BUSD), its own branded stablecoin issued by Paxos Trust Company. 

Binance Coinbase

However, in June 2023, the New York Department of Financial Services ordered Paxos to stop issuing BUSD, citing regulatory concerns. Since then, Binance has been experimenting with other relatively lesser-known stablecoins, such as TrueUSD (TUSD) and First Digital USD (FDUSD).

TUSD is another dollar-backed stablecoin issued by TrustToken, but it faced some issues with depegging and issuance halt in June. FDUSD is a new stablecoin issued by a Hong Kong-based company that has gained traction on Binance after the exchange launched several trading pairs for it and offered zero trading fees.

The rise of FDUSD has also caught the attention of Tether (USDT), the dominant stablecoin in the market. Tether’s chief technology officer Paolo Ardoino tweeted that USDT was being pressured down and USDC, its main competitor, was also heavily redeemed. He hinted that Binance might be behind the move, as he said that FDUSD was “a competitor born 2 days ago”.

Binance’s stablecoin strategy reflects its ambition to become a global leader in the crypto industry. By using different stablecoins, the exchange can cater to different markets and regulatory environments. However, it also poses some risks and challenges for users and regulators, as some of these stablecoins may lack transparency and compliance.