Binance and Coinbase Showing Their True Colours

Binance ditching many USD-stablecoins in favour of their own BUSD.

Binance to Auto-Convert USDC, USDP, TUSD to BUSD (Binance USD)

What Is BUSD Auto-Conversion and How to Deposit and Withdraw USD Stablecoins on Binance

From Bloomberg: Binance Will Convert Users’ USDC Into Its Own Stablecoin

Binance doesn’t anticipate any regulatory implications from the change, which it had agreed on with Circle and other involved third parties in advance, a spokesperson for the company said by email.

Binance didn’t say why the changes don’t involve Tether’s USDT, which currently has a circulation of around $67 billion. “The consolidation of stablecoins on one of the world’s most active exchanges foreshadows future competition among stable assets,” a representative for Tether said in an emailed comment.

The losers here are the two minor coins, TUSD and USDP, both of which are ERC-20 tokens. USDT, Tether, is also an ERC-20 token although its dominant flavour is now as a Tron token - as it has much lower fees. The subplot here may well be that the ETH ecosystem may feel the need to have its own pegged coin. If the Merge does bring much lower fees, then this could be the time to either push one of those existing pegged coins, or create a new one.

So... both Coinbase and now Binance are playing the same game. This smells like creating crypto dominions that will be dominated by their own minted pegged coins. It then becomes easier to regulate the sprawl of crypto by defining safe havens. Before anyone complains, this is mass adoption writ large.