In yet another jolt to USDC, the second largest stablecoin, yet another crypto exchange is set to delist it. Earlier this month, top exchange Binance announced its plans to discontinue support for USDC transactions. As per the plan, all new USDC deposits would be auto converted into BUSD, Binance’s own exchange token. In a fresh update, another crypto exchange joined Binance in delisting USDC and supporting BUSD.
The Stablecoin Shuffle – Binance Effect
Apparently, Binance looks to increase BUSD’s usage and volumes and establish it as a top stablecoin. But this could have a significant impact on USDC’s prospects, considering Binance’s huge crypto volumes. All deposits of USDC, USDP and TUSD stablecoins will get converted to BUSD on the top exchange. Meanwhile, Indian exchange WazirX said it stopped deposits of USDC, USDP, and TUSD, and discontinued support to any new deposits.
“To enhance liquidity and capital efficiency for users, WazirX will implement BUSD Auto-Conversion for users’ existing balances of USDC, USDP, and TUSD stablecoins at a 1:1 ratio.”
Users’ stablecoin balances after delisting will be automatically converted to BUSD before October 5. Following the auto-conversion, users will be able to withdraw USDC, USDP, or TUSD at a ratio of 1:1 from their BUSD balances. With this, there is a possibility that USDC’s market cap could have a dent in near future.
Will USDC Dethrone USDT?
Tether’s USDT, the largest stablecoin by market cap, currently is valued a total of $67.92 billion. Whereas USDC holds a total market cap of $50.13 billion. Recent growth patterns showed that USDC could exceed USDT’s total market size. There was a huge gap in the growth rates of the two cryptocurrencies. Going by the same pattern, USDC looked set to dethrone USDT as soon as October of 2022. However, the Binance auto conversion factor could put a dent in USDC stablecoin’s growth rate. Adding to this is another setback in the form of WazirX delisting USDC.
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