The biggest crypto exchange by trading volume, Binance, took immediate action over the stablecoin saga on March 13 by converting $1 billion BUSD to Bitcoin (BTC), Ethereum (ETH), and BNB.
Binance CEO Changpeng Zhao (CZ) explained that the funds were meant for Industry Recovery Initiative set aside to help strong projects with any liquidity crisis. And it has become necessary to convert due to changes in stablecoins and banks.
Following the announcement, CZ further shared the transfer txid which took 15 seconds and cost $1.29 to be completed.
Recall that Binance launched its crypto industry fund titled “Recovery Fund” in Nov. 2022 sequel to the collapse of the FTX exchange. The initiative was directed at preventing the indiscriminate collapse of small blockchain startups.
At the time of writing, Binance holds 7.56 billion BUSD stablecoins as per Nansen’s exchange portfolio tool. CZ’s decision was taken following the indiscriminate collapse of Silicon Valley Bank (SVB) and state takeover of Signature bank over the weekend.
In the same vein, BUSD stablecoin has also been under regulatory scrutiny following the order on the issuer company Paxos to stop minting the stablecoin.
Meanwhile, Circle’s stablecoin (USDC) that would have been the viable option was also enmeshed in a latest drama by losing its dollar peg after the firm revealed it has $3.3 billion in Silicon Valley Bank (SVB).
USDC Regains Lost Values
While Circle’s USDC plummeted to an all-time low of $0.87 on Friday night following the indiscriminate fold up of SVB, the stablecoin has regained lost grounds as it is trading at $0.999 as per CoinMarketCap data.
Meanwhile, it appears that deposits are insured and there is no need to worry. Already, the California state regulators have placed the bank under the control of the FDIC after the unfortunate development.
As of now, leading crypto firms such as Coinbase crypto exchange, crypto lender Celsius, and BUSD stablecoin issuer Paxos have funds been trapped in Signature bank.
As the bank sector crisis unfolds, it appears that the biggest beneficiary is Bitcoin. The digital asset continued to rally early Tuesday, rising to a three-week high of $24,900 as per CoinMarketCap data.
