BUSD vs. USDC
Binance announced it would be converting all USDC, USDP and TUSD stable coins on the exchange into BUSD at the end of this month.
Binance also announced that it will be removing all USDC, USDP and TUSD trading pairs on the exchange.
Note that these stable coins will automatically be converted into BUSD and any open trades involving these stable coins will be automatically closed and liquidated in the case of Leverage trades.
Binance’s BUSD is issued by Paxos a fully regulated Trust Company in the United States which seems to have the best track record as far as stablecoin reserves go.
Circle 2 is based in the United States and its USDC stablecoin has come to have the same kind of high quality reserves as Paxos’s BUSD albeit with slightly less regulatory oversight.
The same is true for TrueUSD and its TUSD stablecoin by contrast Tether is not based in the United States and though the reserves backing its USDT stablecoin have been improving.
They are not nearly of the same quality as its competitors this has resulted in lots of regulatory scrutiny from the United States and other countries.
Now as it so happens Binance confirmed to coin Telegraph shortly after its stablecoin enhancement that the exchange may eventually apply the same Auto conversion to Tethers USDT.
What this means is that Binance has effectively declared war on all other stablecoin issuers and that is a very big deal.
This is why it’s so odd that Circle CEO Jeremy Alaire said that Binance’s auto conversion of USDC into BUSD is a good thing for USDC consider that most active USDC trading pairs are on binance so eliminating them almost guarantees that USDC’s liquidity will be significantly reduced.
That said there is one very important factor that could protect exchanges and stablecoin issuers and that’s the adoption of US dollar stable coins which continues to accelerate as inflation continues to rise around the world and foreign currencies continue to collapse against the Greenback.