Binance, Issuer of Third-Biggest Stablecoin, to Stop Supporting Larger Rival USDC

The action effectively removes the world's second-biggest stablecoin, USD coin, as a tradable asset on Binance's giant platform.

AccessTimeIconSep 5, 2022 at 5:33 p.m. UTC
Updated May 11, 2023 at 4:23 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Binance, the world's largest cryptocurrency exchange by volume, has shaken up the vital stablecoin market, announcing it will automatically move customers' funds to its Binance USD (BUSD) stablecoin from alternatives, including the larger USD coin (USDC).

Binance said on Monday that it will convert all investments in USDC, pax dollar (USDP) and trueUSD (TUSD) into BUSD on Sept. 29, and customers transferring those tokens to the exchange will see them automatically converted into Binance's stablecoin after that date. However, customers will be able to withdraw money denominated in USDC, USDP or TUSD when removing money from Binance.

The decision effectively banishes the second-largest stablecoin, USDC, from one of the most prominent perches in crypto, erecting an obstacle to overtaking tether (USDT) as the biggest one. USDT's $68 billion market value leads USDC's $52 billion, while BUSD is in third place at $19 billion. USDP and TUSD are far smaller.

The surprise move comes as Binance goes after another exchange rival, Coinbase (COIN), by undercutting it on price.

Stablecoins are part of the crypto market's foundation, serving as digital substitutes for the U.S. dollar or other fiat currencies. "Stable" comes from the fact that their price is pegged to a conventional currency or other type of asset such as gold. Each token tied to the dollar, for instance, is always supposed to fetch almost exactly $1, though the quality of the assets backing a stablecoin can influence how far the price strays.

The business is dominated by USDT's 44% market share.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Jamie Crawley

Jamie Crawley is a CoinDesk news reporter based in London.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.