After the crackdown on BUSD and the SEC investigation, is Binance looking for a new stablecoin to use in its ecosystem?
The cryptocurrency market has been determining the direction of movement for years with the effect of news flows. While negative news on the agenda reveals instant price drops, news such as partnership can put the possibility of a rapid rise on the table. The recent news feed has been the BUSD stablecoin actively used in Binance’s ecosystem.
Amid all these pressures and investigations, how does Binance plan to fill the ecosystem gap on the BUSD side? As Coinkolik, we have compiled four different possibilities on this problem for you.
Why Did Binance Leave Many Altcoins Only on BUSD?
Looking at the events on the Binance USD (BUSD) side from the very beginning, it can be observed that the events go back to the FTX period. FTX, which went bankrupt towards the end of last year, had a devastating effect on the crypto market.
Following the bankruptcy of FTX, Binance CEO Changpeng Zhao made striking statements. Zhao explained that they are now the largest and therefore will be subject to a lot of attacks. Months after the Binance CEO’s statement, dozens of negative news fell on the stock market.
Binance has made moves to some altcoins, arguing that it is trying to maintain its liquidity balance after FTX’s bankruptcy. Many altcoins listed on the exchange have been delisted from various parities and are only traded in the BUSD parity. This made Twitter think that the BUSD bull might be experienced.
Altcoins such as SelfKey (KEY), Aergo (AERGO), Cream Finance (CREAM) offer trading only with BUSD as fiat currency. This serves to raise the volume rates on the BUSD side.
But could this step taken by Binance be an effort to build volume for BUSD? Could Binance CEO Changpeng Zhao have foreseen what could happen? Looking at all these questions, it can be observed that Binance is trying to be prepared for the entire wave of FUD going forward. The CEO of Binance reveals this with his frequent “4” sharing on Twitter.
Binance, Paxos and SEC Triangle: Goodbye BUSD!
Implying at every opportunity that FTX is the biggest with its bankruptcy, Binance is also struggling with various FUDs spreading globally.
In the past months, Binance has made various moves to further increase its dominance in the industry. The exchange, which created a billion-dollar fund to recover the collapsed market due to FTX, on the other hand, brought proof of reserve for users. Trying to restore the lost trust in the crypto industry, Binance spent months working hard. However, the stock market had to be questioned many times in all its moves. Binance CEO Changpeng Zhao stated that such actions should be considered normal since they are the biggest.
The popular crypto exchange faced a new news flow just as the processes were settled. The SEC, the most powerful US regulator, has taken action for Binance’s ecosystem product, BUSD. The SEC has announced that it is investigating BUSD issuer Paxos. The fall of these news caused the FUD wave to spread on the Binance side. Binance CEO Changpeng Zhao stated that they are not an issuer on the BUSD side, they are only used in the ecosystem. Paxos, an independent issuer, announced that it will no longer print BUSD and is ending this service.
This news feed spawned the drops for BUSD, Binance’s ecosystem product and the third largest stablecoin by market cap. The stablecoin, which is Depeg, has also faced various delists. Finally, Coinbase recently announced that it will delist BUSD on March 13. Binance, which seems to have given up on BUSD, has been the subject of curiosity about what kind of move it will make going forward. It has been stated in the crypto community and many investors that Binance will create or choose a new ecosystem stablecoin. So what can Binance do in a possible new stablecoin move?
Binance Is On The Agenda With Possibilities About New Stablecoin
Popular cryptocurrency exchange Binance is arousing curiosity with its forward move after the latest news on the BUSD side.
BUSD was delisted on many exchanges, BUSD issuer Paxos stated that it would stop services, the SEC saw BUSD as an unregistered security, and Binance CEO Changpeng Zhao gave up on BUSD. These developments also attracted attention due to the moves that Binance can make on a new stablecoin. So, what possibilities is Binance pregnant with?
1- Terra Classic USD (USTC)
Terra, one of the most popular ecosystems of a period, had a $ 40 billion drop due to its algorithmic stablecoin structure. This strong decline also caused the beginning of a bear market in the crypto industry. Terra USD (UST), a Terra ecosystem product, became a depeg due to its algorithmic link with Terra Luna (LUNA). The UST, which strayed from 1 dollar, fell to the level of 0.01 dollars, creating a great wound in the sector.
The Terra ecosystem, which was restructured after the bad scenarios experienced, managed to get the support of Binance. Binance has signaled that it stands behind the renewed Terra coins. Especially Terra Classic (LUNC) managed to attract attention again with the burning model launched by Binance. On the other hand, the stablecoin, which was restructured with the name Terra Classic USD (USTC), was evaluated with the possibility that it could be fixed at the 1 dollar level again.
After Binance’s troubles with BUSD and the indirect loss of its ecosystem stablecoin, rumors of a new stablecoin began to spread. The new Binance stablecoin touted by the crypto community is USTC. Many crypto influencers have claimed that USTC will now be actively used by Binance. Following the emergence of these allegations, USTC experienced an increase of more than 30 percent.
However, Binance and Binance CEO Changpeng Zhao did not make an official statement that USTC will become an ecosystem stablecoin. Looking ahead, though, USTC is also on the table in Binance’s pursuit of stablecoins. USTC, which is among the most popular stablecoins with a cheap market value, stands out as having the potential to be the choice of Binance. Nothing definitive, but USTC could replace BUSD.
2- True USD (TUSD)
Earlier in the day, WuBlockchain shared a bombshell news about Binance. WuBlockchain stated that Binance has minted $130 million in True USD (TUSD). Following this news, TrueFi, which is behind TUSD, has increased by nearly 50 percent.
After Binance’s $130 million print, TUSD has risen to the top five stablecoins by market cap. The current market value of TUSD is $1.12 billion, up 15 percent in the past week. According to WuBlockchain, Binance says it will work with more stablecoin partners.
Binance, which was almost without a stablecoin with the blow on the BUSD side, attracted attention with this move on the TUSD side. The possibility of TUSD being the new stablecoin in the Binance ecosystem has gained seriousness with this move.
On the other hand, TUSD is issued by TrueFi. This is tantamount to the issuance of BUSD by Paxos. Struggling with the SEC’s investigations, Binance may not enter a similar stablecoin move.
Still, for Binance, which has issued a TUSD of 130 million dollars, it continues to be talked about that the new stablecoin will be TUSD. In such a situation, it is thought that the collaterals on the BUSD side can also be transferred to TUSD.
3- USDD
Launched by Tron founder Justin Sun and attracting a lot of attention at first, USDD is among the newest stablecoins.
The powerful stablecoin, backed by the Tron network and the Huobi exchange, also struggled with “what if” questions after the Terra crisis. Sun stated that USDD has strong collateral support and it will not be possible to become a depeg. However, USDD has depegated from 1 dollar in the past months. Still, USDD stands out as the seventh largest stablecoin by market cap, thanks to the strong support behind it.
During the times when FTX went bankrupt, many crypto institutions cooperated. During the minor liquidity issues on the Binance side, a move came by Tron founder Justin Sun. Sun transferred millions of dollars of assets to support Binance’s liquidity.
Sharing on social media, Sun added that he always stands by Binance. The Tron founder, who also took Huobi consultancy, attracted attention with his support to Binance.
The bilateral relationship between Binance CEO Changpeng Zhao and Tron founder Justin Sun highlighted that they can also support each other as collateral. Having survived the FTX period together, the duo may also act together in a new wave of FUD. In this case, Binance may make a new move for USDD, which it has not yet listed on its exchange. Changpeng Zhao, who is likely to close the gap on the BUSD side, may put USDD on the stock market with a new listing news.
The fact that USDD has a market value of 700 million dollars, strong supports behind it and not having an algorithmic structure are among the most important structural features. Although Binance fills the gap of BUSD with USDD, it will act in partnership with Justin Sun. If the stock market on the SEC’s radar makes this move, it can display a credible image and thus end the pressure.
4- Binance Can Create A New Stablecoin
Popular cryptocurrency exchange Binance has also signaled that it can create a new stablecoin to replace BUSD, which it says is not an issuer.
Binance will have to turn to other stablecoins as it has given up on BUSD, which it indirectly uses. Strong teams on the side of Tether (USDT), USDC and Dai are in conflict with Binance’s vision. Considering the best in the crypto industry, Binance may not prefer to use strong stablecoins such as USDT, USDC and Dai.
Looking at the latest possibility of our news, Binance’s creation and issue of its own stablecoin is also on the table. Since the SEC’s biggest focus is on unregistered securities, Binance will have to register its stablecoin.
Being familiar with this situation, USDC manages to maintain its collateral power as a result of its cooperation with traditional banking actors and regulatory agencies. In the event of creating a new ecosystem stablecoin, Binance can centralize the necessary collateral under the SEC’s oversight, rather than providing it from its exchange or algorithmic structures.
In a possible new stablecoin move, Binance has the power to place its product, which it will issue and launch, among the top three stablecoins in terms of market value.
Still, there is no official or talked about what might happen in the near future.
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