Binance just blacklisted three major cryptos
Imagine if tomorrow Apple announced they would be banning Instagram from the iPhone.
...and replacing it with their own app that was a one-to-one copy - let's call it 'iGram.'
Binance are about to do something similar with stablecoins on their exchange platform.
They're replacing users’ existing balances and new deposits of USDC, USDP, and TUSD stablecoins at a 1:1 ratio, with their BUSD stablecoin.
And it's all in the name of liquidity...but what does that actually mean?
Liquidity refers to how easy something is to buy, sell or trade.
High liquidity means there’s a big market for an asset, meaning it can be bought and sold quickly, at market price.
On the flip side, something like rare art is relatively illiquid. Buyers and sellers are harder to come by, and a work’s price can vary wildly from year to year, as demand fluctuates.
Imagine if the US had four different currencies, all of which had varying degrees of popularity. Some businesses might accept them all, others may look at certain currencies as 'risky' and have strict preferences on what they accept.
If they were to all be consolidated into one currency, it would solve these liquidity issues.
That's the public play here with BUSD...the not-so public play is (most likely) one for market dominance.
Binance are the world's largest cryptocurrency exchange, by absorbing any holdings of these three coins on their platform:
USDC ($52B) + TUSD ($1B) + USDP ($945M) = $53.94B.
...and rolling them into BUSD (currently worth $19.5B) - they can take a big leap towards grabbing the top spot from the world's most dominant stablecoin.
(Which is currently Tether's USDT at $67.5B).
