Binance has for years now been the target of various regulators across the world. Over the last few months though it has at least appeared that the page had turned since they were working with regulators and getting licenses that they needed. With Binance's recent announcement about effectively delisting several stablecoins including the second largest by market cap USDC and converting users' funds into BUSD, their stablecoin, the result is several questions about Binance's intentions for this.
When I first saw this I was pretty surprised because well it was a bold move to try and make in the current climate. As I looked into how people were reacting to the news I was even further perplexed by not only the division but what the division was based upon. I was pretty surprised by the number of people I saw that did not care at all and were accepting of the change. While some of the smaller stablecoins probably did lack liquidity issues with different pairs and this could help them the issue with USDC did not make any sense whatsoever. USDC is the number 2 stablecoin and BUSD is the number 3 with USDC being over 2 times as large as BUSD.
For US citizens across the world, this also causes a huge issue as by sweeping someone's crypto into another even with there not being a value different current US law states that you have to report the transaction. This means that people could wind up with a ton of transactions that they are going to be unaware of until they file their paperwork. With many tax companies within crypto charging per transaction or transaction bunches this creates a surprise they might not be aware of.
I have also been taken back by people willing to look past this immense move to further centralize power. USDC was a competitor and so BINANCE really just chose to remove them from the equation. It is something that I would not have expected people to be so willing to overlook as I see it as setting a bad precedence for the future. Regulators are also going to focus on this, especially with the US looking to establish stablecoin laws. BUSD might be a partnership with Paxos an American company however the partnership is not with Binance.US rather it is with the parent company Binance. This means that Binance does in some form operate in the US and that regulators can easily move to really dive into the company's books.
The way that I see it this is just something that is going to encourage regulators and the government to pry and request information that is a detriment to the industry and not something that will boost the industry. With Congress coming back into session next week I would not be surprised to see this be brought up as the Financial Services Committee finishes hashing out the Stablecoin bill that they had to push back from July.
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