Binance recently announced that they will start auto-converting some of your stablecoins into $BUSD. Is it a powerplay or simply something that makes sense?
When will the autoconversion start?
Binance has announced the autoconversion of users' existing balances and new deposits of $USDC, $USDP, and $TUSD stablecoins at a 1:1 ratio. will take effect from 2022-09-29 03:00 (UTC). This means that instead of these three different stablecoins the user will simply have one, $BUSD.
Binance has however said in their statement that this will not affect the user's choice for withdrawing their funds. The users' will still be able to withdraw their funds from $BUSD in a 1:1 ratio to $USDC, $USDP, and $TUSD. This means that at least initially, this is only a change that is internal in Binance.
The link to Binance's full announcement is down below.
Why the change?
The major factor behind this appears to allow for better liquidity for the users. Having only one stablecoin instead of four will allow for a greater liquidity pool for the users, meaning better and more trades available for the users.
But of course, it will not hurt that the one coin that will be replacing them is BINANCE own stablecoin, $BUSD.
Will this mean Binance CEO CZ will take over the world? No, well at least not this year. But of course, it sends a signal to other Dapps, Dex, and Cex, especially on the Binance Blockchain. And as a result, we could start to see an overall consolidation and removal of some stablecoins over time. So in that sense, I guess it is the first step toward total domination.
Personally, I am kind of divided on this. On the one hand, I can understand the need to make sure there is sufficient liquidity to facilitate trades. But on the other hand, it is a slippery slope when you start doing things like this. Will the next step be to do this for all stablecoins? And what comes after that, simply removing a few of them as options for your withdrawal. And then ultimately have the users only be able to withdraw BUST and nothing else.
What are your thoughts on this, do you think it is a good thing? Or do you see the potential for forcing people and eliminating their options for them? Please share your thoughts on this in the comment section down below.
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Picture provided by: Binance
