/crypto
sordum
·
2 years ago
Binance stablecoin conversion controversial, but what does it mean for users?
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. 
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.
“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. “I don’t think it’s going to affect [many] investors.”
Stablecoins got the name because their value is pegged to another non-crypto asset, such as the U.S. dollar or gold. They are an entry point for many new investors in cryptocurrencies, offering market access without the volatility of other tokens. 
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. As 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. Terra imploded with its paired cryptocurrency Luna.
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