The world's largest centralized exchange, Binance, announced significant changes to its trading mechanisms in a recent update. To improve user trading efficiency, Binance has discontinued many stablecoin trading pairs. Circle's founder, the issuer of USDC, commented that USDT's market share will gradually shift to USDC and BUSD.
Binance's BUSD Auto-Conversion System
According to Binance's announcement, the platform will automatically convert users' existing USDC, USDP, and TUSD balances—along with new deposits—into BUSD at a 1:1 ratio starting September 29 at 11:00 AM (UTC). Related trading pairs will be phased out throughout September.
Post-conversion, only USDT and BUSD will be available for trading on Binance. BUSD cannot be converted back to its original stablecoins, but withdrawals remain unaffected—users can withdraw assets pegged to BUSD at a 1:1 ratio for USDC, USDP, or TUSD.
Key Impacts on Trading:
- Spot Trading: All pending orders will be automatically canceled after delisting. Users can then trade in the corresponding BUSD pairs.
- Futures: Binance’s USDⓈ-M futures will no longer support multi-asset mode or Unified Trading Account deposits in USDC as margin after September 7 at 11:00 AM.
- Margin Trading: Stablecoin margin pairs will discontinue lending services on September 7. Open positions will be liquidated by September 23.
👉 Learn how to navigate Binance’s new stablecoin policy for seamless transitions.
Parallels to FTX’s Approach
Binance’s liquidity consolidation into BUSD mirrors FTX’s strategy. FTX groups TUSD, USDC, USDP, and BUSD as "USD Stablecoins," allowing only USDT and USD Stablecoins for spot trading. For high-volume pairs like ETH/USD, USD trades often exceed USDT volumes by 5–10x, with daily ETH/USD volumes reaching ~$470M.
FTX US’s CEO noted in January that this unified liquidity model gave the exchange the deepest liquidity among U.S. platforms.
Market Maker Perspectives: A Threat to USDT
Wintermute CEO Evgeny Gaevoy praised the move, stating that reducing stablecoin pairs prevents liquidity fragmentation, benefiting market makers and overall market depth. He emphasized that USDC and other stablecoins gain an edge—users can now deposit/withdraw USDC directly without converting to BUSD/USDT first.
Gaevoy warned that USDT is the outlier: non-USDT pairs will see growing liquidity, and Tether’s operational inefficiencies (e.g., T+1 minting/redemption times, fees) could erode its dominance. Circle founder Jeremy Allaire agreed, predicting USDT’s market share will decline in favor of USDC/BUSD.
FAQ Section
Q: Can I still withdraw USDC from Binance after the conversion?
A: Yes. While balances auto-convert to BUSD, withdrawals allow 1:1 redemption for USDC, USDP, or TUSD.
Q: How does this affect futures trading?
A: After September 7, USDC margin deposits are discontinued. Use BUSD or USDT instead.
Q: Will this change impact liquidity for altcoins?
A: Liquidity may consolidate into BUSD pairs, potentially improving depth for less-traded assets.
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