Behemoth exchange Binance plans to cease support for some Stablecoins, after a recent announcement via a blog post revealed that it was introducing a “BUSD Auto- Conversion” mechanism for users with existing balances or deposits of USDC, USDP, and TUSD, at a 1:1 ratio. Users will be able to see their converted balances on their accounts 24 hours after the Auto-Conversion took place.
The exchange noted that the mechanism, scheduled to take effect on September 29, was being done to boost liquidity and capital efficiency for users.
#Binance to Auto-Convert $USDC, $USDP, $TUSD to #BUSD (Binance USD).
— Binance (@binance) September 5, 2022
Binance informed users interested in converting their USDC, USDP or TUSD balances into BUSD at a 1:1 ratio before the mechanism takes effect, to process this conversion manually in Binance Convert between September 26 and September 29. However, the manual conversion only applies to balances above 1 USDC, USDP, or TUSD. Anything lower would be converted automatically.
What Happens After the Conversion on Binance?
Binance listed the actions that will be implemented once the mechanism takes effect, noting:
Spot Trading
The exchange noted that it would cease all spot trading pairs involving the earlier mentioned Stablecoins on September 26. The trading pairs include USDC/BUSD, USDC/USDT, USDP/BUSD, USDP/USDT, TUSD/BUSD, and TUSD/USDT. Other non-Stablecoin trading pairs to be ceased by the exchange include:
ADA/USDC, ATOM/USDC, AUD/USDC, BCH/USDC, BNB/USDC, BTC/USDC, BTTC/USDC, EOS/USDC, ETH/USDC, LINK/USDC, LTC/USDC, SOL/USDC, TRX/USDC, WIN/USDC, XRP/USDC, ZEC/USDC, BNB/USDP, BTC/USDP, ETH/USDP, ADA/TUSD, BNB/TUSD, BTC/TUSD, ETH/TUSD, TRX/TUSD, and XRP/TUSD.
Also, the exchange detailed in the blog post that all pending trade orders involving the mentioned Stablecoins will be closed once the conversion goes into effect. It added that users can then place the orders again in the respective BUSD pairs.
Futures Trading
Already, Binance USDⓈ-M Futures ceased to support new deposits of USDC as margin assets under the Multi-Asset Mode or Portfolio Margin Program on September 7. That said, Binance USDⓈ-M Futures Wallet will begin automatically converting USDC assets to BUSD on September 29 and would take 24 hours.
Binance warned users not to place new positions during the conversion period, noting that such action could lead to uninsured losses.
Margin Trading
Binance has also ended margin lending involving USDC/BUSD (Cross & Isolated), TUSD/USDT (Isolated), and USDC/USDT(Cross & Isolated) since September 7 and will halt margin trading on the listed pairs on September 23. The exchange noted that all open margin positions will be automatically closed and liquidated on that day.
The exchange warned that users close all their positions before the event takes place to avoid being victims of potential losses, which the exchange would not insure.
Conclusion
The latest decision comes as Binance moves to prioritize its Stablecoin, BUSD, over other Stablecoins in the market.
This raised questions about what the fate of USDT might be. However, Binance recently came out to confirm that it has no plans of auto-converting USDT to BUSD yet. However, it added that this could change soon.
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