Binance suspends its BUSD auto-conversion for new deposits of the USDC, USDP, and TUSD stablecoins amid Circle’s Dollar Coin (USD) depeg.
On Saturday, Changpeng “CZ” Zhao, CEO of Binance, said that the company would no longer maintain its Binance USD (BUSD) Auto-Conversion policy, which had been in place since last September. Surprisingly, the action was taken after Circle’s USDC stablecoin depegged as a result of its $3.3 billion exposure to the defunct Silicon Valley Bank.
The crypto exchange has reportedly ceased automatically converting new deposits of the USDC, USDP, and TUSD stablecoins to BUSD as of March 11. Users won’t be able to take money out of their BUSD balances in the form of USDC, USDP, or TUSD.
Also, on March 18, customers can use the Binance Convert function to exchange their BUSD to USDC or USDP at a 1:1 ratio. With the Convert function, users can manually convert their BUSD holdings to TUSD, however the exchange has not yet specified a timeframe for TUSD conversion.
Note, the conversion of TUSD, USDC, or USDP to BUSD is invalid because the crypto exchange had previously declared halting BUSD support because Paxos had stopped minting BUSD following an order from American regulators.
After Circle’s USDC depeg, Binance has also added a number of stablecoins to support the cryptocurrency community. The new spot trading pairs BNB/TUSD, BTC/TUSD, ETH/TUSD, TUSD/USDT, USDC/USDT, and USDP/USDT are available for use by users.
U.S. Regulators’ Anti-Binance Position
To improve liquidity and capital efficiency for customers, the crypto exchange stopped supporting competitor stablecoins like USD Coin (USDC), USDP, and TUSD last year.
BUSD’s dominance increased as a result, and the market caps of other stablecoins like USDT and USDC kept decreasing. The CEO of the exchange thinks American officials launched an anti-Binance campaign to eliminate the company’s supremacy in the cryptocurrency market because they were concerned about foreign influence.
Authorities also objected to Binance.US, a branch of the exchange based in the United States, buying the assets of the defunct crypto lender Voyager Digital. The transaction was approved by the bankruptcy court for Binance.US, but the US DOJ appealed the judge’s ruling.
