Circle CEO thinks USDC exit from Binance is a good thing

Jeremy Allaire – CEO and co-founder of Circle – is unfazed by Binance’s recent decision to stop supporting USDC trading.

In a Tuesday thread, Allaire explained why he believes that development is not only good for Binance but ultimately a boon to the use and adoption of USDC.

Binance converges around BUSD

Monday, Binance most dangerous That all existing funds of its clients in USDC, USDP and TUSD will be automatically transferred to Binance USD (BUSD) on September 29. The exchange’s native stablecoin is currently the third largest by market capitalization – after USDC and Tether’s USDT.

The move aims to “improve liquidity and capital efficiency” on the exchange by merging several cryptocurrencies that are equivalent to the dollar around a single asset.

The change will result in the cancellation of USDC trading on Binance and will result in the conversion of all future USDC deposits on the exchange to BUSD. However, users can still choose to withdraw their account balance in USD from the exchange in either USDC, USDP and TUSD if they wish.

Looking at these details, Alair claimed That the forced transfer “will likely result in more USDC flowing into Binance.”

“With consolidated dollar books, it will now be easier and more attractive to move USDC to and from Binance for trading in the underlying market,” he explained.

Unlike BUSD, USDC sees significant volume and usage outside of the Binance exchange. As such, Allaire believes that the change will help the USDC become the preferred stable rail in the market for moving funds between centralized and decentralized exchanges.

“I am very confident in the long game we’ve been playing and playing at USDC, and with Circle’s role as a neutral player in the market infrastructure,” concluded the CEO.

What about tether?

USDT – still the world’s largest stablecoin – has been specifically excluded from the Binance consolidation. The cryptocurrency will still be tradeable on the exchange.

Allaire said there are two reasons for this. First, Binance’s existing USDT liquidity would have made the switch to BUSD very disruptive. Second, he said that USDT is “nowhere near” to qualifying as a cash equivalent asset.

Tether has often been criticized for having an unreliable reserve asset to back its stablecoins – more than its competitors. Part of this stems from Tether’s partial use of commercial paper in its reserves, while BUSD and USDC Backed only by cash and US Treasuries.

Rope defend She responded to such accusations by the Wall Street Journal last month. The company indicated that it plans to dispose of its commercial paper holdings before the end of the year and that its business remains profitable.

The CEO of Post Circle believes that USDC exit from Binance is a good thing for the first time appeared on CryptoPotato.

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