Binance, the top centralized exchange by trade volume, announced it will delist three popular stablecoins and convert users’ balances into its own BUSD stablecoin.
Beginning Sept. 29, Binance will automatically convert users’ accounts and new deposits of USD Coin (USDC), Pax Dollar (USDP), and TrueUSD (TUSD) into Binance USD on a one-to-one basis.
Users will still be able to withdraw the unsupported stablecoins, with Binance converting them into fiat currency for clients from BUSD on a one-to-one basis.
CZ, the founder and CEO of Binance, tweeted that the move is intended to consolidate stablecoin liquidity on the exchange. He also asserted that, technically speaking, the stablecoins will not be delisted from the platform, emphasizing that users can still deposit and withdraw the tokens.
But many investors rejected his explanation and said the move amounted to a token-grab.
“The war of the crypto giants has begun,” Twitter user YasmineAndreea posted. “Binance will delist USDC on September 29, thus making way for its own stablecoin BUSD to prosper. It’s a serious blow to Circle and Coinbase, USDC adoption will be seriously affected!”
USDC is the No. 2 stablecoin with a capitalization of $52B. TUSD ranks sixth with $1B, followed by USDP with $966M. Binance USD is the third-largest stable token with a $19.5B market cap.
All spot stablecoin-to-stablecoin pairings featuring the tokens will be removed from Binance on Sep. 26, with all other spot pairings including the tokens scheduled for delisting on Sep. 29.
Margin traders are encouraged to remove USDC from their leverage accounts and top up their collateral before Sep. 23. Stablecoin-to-stablecoin margin pairings will be delisted on the same day. Binance’s futures markets will cease supporting USDC as leverage collateral from Sep. 7.
Binance Pay, Binance’s payments service, will also stop supporting USDC, USDP, and TUSD on Sep. 12.
Many onlookers criticized Binance’s move.
Bitfinexed, the outspoken Tether critic, asserted that in order to properly convert USDC into BUSD the exchange must “redeem the USDC, then have BUSD issued by sending the money to PAXOS.”
“If they are telling the truth, we should see issuance of USDC fall, with PAXOS issuances rising,” Bitfinexed continued. “This is a delisting, not a ‘merging of liquidity’.”
Others highlighted the recent controversy surrounding wallets associated with the blacklisted crypto mixer Tornado Cash getting frozen by Centre, the consortium behind USDC.
Centre froze 38 wallets holding 75,000 USDC on August 10 after Tornado Cash was sanctioned by the U.S. Treasury Department last month. While the move has been attributed to Tornado Cash’s usage by the North Korean hacking group, Lazarus, the news sparked outcry from decentralization devotees who supported the service as a method to maintain privacy on-chain.