Binance is removing USDC from its platform by forcibly converting the stablecoin to its own stablecoin BUSD.
The same will be done to user deposits of USDP and TUSD from 29 September 2022.
USDC – operated by Circle Internet Financial – is the second-ranked stablecoin by market cap after Tether’s USDT and has a market cap of US$52 billion, whilst BUSD is third at US$19.3 billion.
In a statement, Binance said the conversion is intended “to enhance liquidity and capital-efficiency for users.”
USDC saving accounts, DeFi staking subscriptions and crypto loans and other products will be closed and liquidated on 23 September 2022.
By removing USDC from its platform, Binance aids stablecoin consolidation in the market and improves market liquidity. It also facilitates user conversion from USDC by allowing them to skip a step in converting to BUSD.
Twitter user “wishful cynic” explained “this is positive for USDC (and TUSD and others) – you should still be able to deposit and withdraw USDC seamlessly to/from binance. Before this change you would need to convert it to BUSD/USDT and then use it to trade margined perps.”
However, Binance’s iron fist approach in forcing users hands arguably undermines the principals of crypto’s promises of financial autonomy.
Following Binance’s announcement, Huobi co-founder Du Jun cheekily tweeted that “crypto is about being open and transparent.”
“Huobi gives our community options, trade from a range of stablecoins on our platform. We won’t force you to trade a particular asset just because it’s ours. It’s about more choices for our community,” he continued, tagging USDC and USDT.
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Whilst his tweet was primarly a plug for Huobi, his point about community choice is certianly valid.
“Pretty hostile move from @binance to push adoption of #BUSD at the expense of user choice.” another Twitter user wrote.