in Hong Kong, compared to only US$256 million for Bitcoin/USDC.īut as USDC and the two other stablecoins are consolidated under BUSD, that gap is expected to narrow significantly. And that will have repercussions for the other stablecoins out there,” said Feeney, adding that that would include Tether.Īs one of the oldest stablecoins, Tether has long been the standard stablecoin for conducting trades, but Binance’s move could shake confidence in the token, said Feeney.ĭata from CoinGecko shows that Bitcoin/Tether trading pairs on Binance were roughly US$5.8 billion in the 24 hours to 2 p.m. “It’s a strategy by Binance to use their exchange dominance to boost and strengthen their own stablecoin. Not everyone buys that theory, including Lachlan Feeney, chief executive officer and founder of Australian blockchain development agency, Labrys Group Pty Ltd. “For Binance, they would be constantly losing money and people would arbitrage the hell out of it,” Vandelook said, adding he agreed the Binance move has benefits for investors as it will centralize liquidity. This means its price on Binance is not always exactly US$1, and so is not always redeemable with other stablecoins that match US$1 more consistently. USDT, however, requires a redemption or creation fee of 0.1% for each fiat withdrawal and deposit when it is created or redeemed through Tether, the coin’s issuer, with a minimum deposit of US$100,000 Kasper Vandeloock chief executive officer of Musca Capital, a Brussels-based quantitative trader in digital assets, said he thinks he has the answer and it’s linked to possible arbitrage.Īll three of the selected stablecoins are redeemable without any fees, as they are backed 1:1 with mainly U.S. His comments mirror Binance’s statement on the matter, which said the move was designed to “enhance liquidity and capital efficiency for users.” Left outīut absent from that list of stablecoins targeted by Binance was Tether, or USDT, the world’s largest stablecoin with a market capitalization of more than US$67 billion. “So, the only thing that Binance is doing, and some would say it’s actually offering a service, of a 1:1 conversion between those stablecoins and BUSD,” said d’Anethan, adding “so you’ll have more liquidity, faster transactions less slippage, essentially.” So, as far as d’Anethan sees it, they are getting an acceptable deal. All trades involving these three tokens on the Binance platform would be denominated in BUSD.Ĭustomers would still be able to cash out of the platform in any of those stablecoins. The same procedure will follow for Pax Dollar (USDP), market cap of just under US$1 billion, and True USD (TUSD), which has a market cap of US$1 billion. Stable as a tableīinance will convert all customers’ current and future holdings of USD Coin (USDC) – the second-largest stablecoin with a market cap of US$50 billion – into BUSD, which is the world’s third-largest stablecoin in its own right with a market cap of US$20.5 billion. Terra imploded with its paired cryptocurrency Luna. Partly due to the unilateral nature of the Binance decision, some investors did question if the move would shake trust in stablecoins and shift trading patterns.Īs stablecoins account for three of the top 10 cryptocurrencies by market capitalization, disruption to trade could ripple through the entire crypto market, which is still recovering from the multibillion-dollar collapse of the so-called algorithmic Terra stablecoin in May, which wasn’t pegged to any non-crypto asset. They are an entry point for many new investors in cryptocurrencies, offering market access without the volatility of other tokens. Stablecoins got the name because their value is pegged to another non-crypto asset, such as the U.S. “I don’t think it’s going to affect investors.” “I really don’t think it is going to change the supply, the distribution, even the behavior of investors when it comes to stablecoins specifically,” said Justin d’Anethan, institutional sales director at digital asset trader Amber Group. The move, which will also end spot, future and margin trading in the three stablecoins, drew comparisons to how users would react to a bank deciding to change their cash deposits from one currency into another, but some analysts see the dynamics as quite different. Binance Global, the world’s largest crypto exchange, raised eyebrows this month when it said it would convert its customer’s holdings in three stablecoins into its own BUSD stablecoin starting from the end of September.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |