Circle CEO On Binance's Auto Conversion Of USDC To BUSD: 'Good For Liquidity'

The CEO of Circle, the firm behind USDC stablecoin, has stated that the auto conversion of USDC transferred into Binance to BUSD will improve the rate at which USDC flows into the exchange.

As per previous reports, Binance has decided to end the support for USD Coin (USDC), Pax Dollar (USDP) and TrueUSD (TUSD) stablecoins and convert all the transfers made to the exchange in these coins automatically to BUSD, Binance's own stablecoin, in a 1:1 ratio.

"Binance is trying to consolidate dollar liquidity w cash equivalent stables. That's good for liquidity and market depth," Circle CEO Jeremy Allaire said via a Twitter post.

Sharing some perspective on Binance forced conversion of USDC. Lots of misleading headlines and interpretations. Binance is not ending support for USDC, and change will likely lead to more USDC flowing to Binance. Here’s why. 1/
— Jeremy Allaire (@jerallaire) September 6, 2022

The world's biggest crypto exchange by trading volume introduced "BUSD Auto-Conversion" while stating that with effect from Sept. 28 at 11 p.m. ET, "users will trade with a consolidated BUSD balance on the Binance Platform that reflects their balances of these four stablecoins (BUSD, USDC, USDP and TUSD) post conversion."

"Binance is not ending support for USDC, and change will likely lead to more USDC flowing to Binance," Allaire commented on the exchange's decision, adding that "with consolidated dollar books, it will now be easier and more attractive to move USDC to and from Binance for trading core markets."

Allaire also pointed out that Binance cannot take the same step for USDT, Tether's stablecoin, because "it would be too disruptive given current USDT liquidity on Binance" and added that it is unlikely that the exchange will be able to convince users to switch to BUSD.

On the other hand, TrueUSD (TUSD) stated that it will comply with the Binance ecosystem and added that the crypto exchange "will maintain multi-chain $TUSD deposit and withdrawal support on their exchange."

💪#TUSD will support @binance as always and have more cooperations with #Binance ecosystem!

Binance will maintain multi-chain $TUSD deposit and withdrawal support on their exchange for all the following token standards👇

✅TRC20
✅ERC20
✅BEP20
✅BEP2 https://t.co/Zj6mnAVkQ6
— TrueUSD (@tusdio) September 6, 2022

Paxos also commented on the decision taken by Binance, stating that it is a positive step for the exchange's customers since BUSD is regulated by NYDFS (New York State Department of Financial Services) "which sets rules and monitors compliance with those rules."

1/ @Binance has made a positive step for the safety of its customers by pushing to support primarily BUSD. Unlike competing stablecoins, BUSD is regulated by @NYDFS which sets rules and monitors compliance with those rules.
— Paxos (@PaxosGlobal) September 6, 2022

Binance USD (BUSD) is among the 24 currencies in the NYDFS green list enabling it to be used in states by licensed firms without any extra regulatory approval.