Binance CEO, CZ, announced that due to recent “changes” in stablecoins and banks, the company’s recovery fund will be converted from Binance USD (BUSD) to “native cryptos” such as BTC.
The bankruptcy of Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank, three significant crypto-backing institutions, caused the stablecoin USDC to drop from its $1 benchmark to as low as $0.87.
On March 13, Binance CEO and co-founder Changpeng (CZ) Zhao tweeted that the company will convert the final $1 billion of its Industry Recovery Initiative funds into “native crypto” due to “changes in stablecoins and banks” as a result of the growing worry about stablecoins.
Among the native cryptocurrencies listed by CZ were Ethereum, Binance Coin, and Bitcoin. Next, he tweeted links to the transaction hash IDs for the BTC and the ETC, noting that it took 15 seconds and $1.98 for $980 million to move.
The crypto community on Twitter reacted to the decision by the co-founder of Binance in different ways. Some applauded the choice, referring to it as “pure gold,” and suggested using alternative currencies to anchor stablecoins:
After selling it, others questioned the decision to convert BUSD, which is meant to be a stablecoin, into more “volatile” assets.
The business behind USDC, Circle, reported on March 10 that the original de-pegging incident was the result of Circle having around $3.3 billion tethered to the failed SVB. The USDC, however, had returned to its $1 peg on March 13 and was now hovering at $0.99.
It is known that Circle also has an unspecified amount of reserve funds locked up in Silvergate, another recently insolvent cryptocurrency-friendly institution based in the United States.
Other stablecoins like DAI, USDD, and FRAX all retreated from their $1 position due to the uncertainty surrounding USDC.
The whole cryptocurrency industry has been on edge as to what would happen next since the events started to take place on March 10. There is “nobody left to bank crypto firms,” according to users in the Twitter community.
