Since announcing that it would discontinue support for competing stablecoins on its exchange, Binance has seen USDC outflows from the platform up by 93%. The popular stablecoin’s market cap has also fallen by 5%.
$26 billion worth of stablecoins, as per Nansen, were sitting on Binance’s exchange on Wednesday afternoon. The blockchain analytics firms highlighted that $20 billion was in BUSD and the rest in competing stablecoins – $683 million worth of USDC, $48 million USDP, and $283 million TUSD. Tether stablecoin (USDT) was the only other sizeable stablecoin worth $5 billion on Binance.
Users, as of Monday, have been able to convert their soon-to-be-delisted stablecoins to BUSD at a 1:1 rate. But from tomorrow, Binance will automatically convert any remaining USDC, USDP, and TUSD balances to its own stablecoin. USDC has attracted the most attention as its the second-largest stablecoin by market capitalization and has also outpaced BUSD.
However, Binance’s decision hasn’t gone down well with users. BloodgoodBTC, a Twitter user, said this was a crypto monopoly whereby Binance was deleting competitors as Google did 10 years ago. Bitfinexed, a vocal Tether, and Bitfinex critic, believes conversations should show a fall in USDC issuance and a rise in BUSD issuances. He said both stablecoins are meant to hold a 1:1 peg with the US dollar, and both Paxos and Circle burn coins as they are redeemed, their issuance can be approximated using their market capitalization.
USDC’s market cap has dipped to $49 billion since Binance’s announcement earlier this month. BUSD’s market cap, over the same period, has risen 8% to $21 billion. Changpeng Zhao, Binance CEO, and Jeremy Allaire, Circle CEO, highlighted that the auto-conversions do not amount to the delisting of USDC. Zhao said users can still deposit and withdraw USDC from the exchange – best price, lowest slippage for all users. Allaire, on his part, said this will likely lead to more USDC flowing to Binance.