[Original] Large exchanges integrate USD stablecoins, and USDT is excluded. Tether at stake?

The world's leading cryptocurrency exchange "Binance" recently announced the BUSD automatic conversion plan, which will take effect at 11:00 (UTC+08) on September 29, 2022. The existing balance and new recharge of the three stablecoins USDC, USDP, and TUSD of platform users will be automatically converted into the stablecoin BUSD issued by Binance at a ratio of 1:1. At the same time, the spot trading pairs of these stablecoins will also be delisted. You may have noticed that Tether (USDT) is not included in it. Is it good news? In fact, this is not a good thing for the future development of USDT.

Data as of the time of publication. The source of the information will be provided at the end of the article

As can be seen from the above table, BUSD and USDC are backed by 100% cash, U.S. Treasury bonds and reverse repurchase assets, while USDT is only 70.5%. In addition, the two have also been approved and regulated by the New York State Department of Financial Services, but USDT has been rejected. Although USDT has the highest market cap among stablecoins, its cash collateral is nowhere near as high. As long as the number of stable coins issued is larger, the market value will be higher, so the market value is not enough to represent anything. When we choose which stablecoins to hold, market capitalization should not be the main consideration. Looking back at TerraUSD (UST), it was the third largest stablecoin in the world at the time.

Many people don't know that FTX has already pioneered the combination of USD stablecoins and trading pairs before Binance. Coincidentally, USDT has also been isolated. The world's two largest cryptocurrency exchanges have taken actions to integrate stablecoins, and at the same time excluded USDT, which seems to be giving us a red flag to some extent. Although no one knows exactly what will happen at this stage, it is imperative to be prepared.

FTX recharge stablecoin interface, USDT is not in the list

In contrast, USDT is classified as a cryptocurrency

USD stable currency (combination) and USDT spot trading pair

Binance’s official announcement caused a sensation in the currency circle, and also caused many misunderstandings and misunderstandings. The author believes that the comments of industry insiders are the most worthy of reference. Jeremy Allaire, co-founder and CEO of Circle (USDC issuing company), said on Twitter that Binance has not ended its support for USDC, and this change may instead allow more USDC to flow into Binance. He believes that Binance is trying to stabilize USD liquidity and cash equivalents, which will benefit liquidity and market depth. Speaking of cash equivalents, USDT is not a cash equivalent — not even close.

Judging from what Allaire and other cryptocurrency professionals have said, they are more than happy to support the removal of stablecoin trading pairs. This allows liquidity to be concentrated on only one trading pair, rather than scattered across different trading pairs. As traders turn to USD stablecoin trading pairs in the future, the liquidity of USDT trading pairs will gradually dry up. Based on the "involution" nature of the currency circle, the author can foresee that more exchanges will follow in the footsteps of FTX and Binance and start integrating stablecoins in the future. Now Tether is on the verge of being eliminated, and only by working harder can it survive in this fierce siege.

BUSD:

https://paxos.com/wp-content/uploads/2022/08/BUSD-Monthly-Stablecoin-Reporting-July-2022.pdf

USDC:

https://www.centre.io/hubfs/PDF/USDC%202022_Circle%20Examination%20Report%20July%202022.pdf?hsLang=en

USDT:

https://tether.to/en/transparency/#reports