Binance to Ditch USDC, ‘Consolidate’ Liquidity Around BUSD

ALSO: Aave paused ETH loans ahead of Merge, Poolin suspends withdrawals and more |

September 6, 2022 The biggest crypto news and ideas of the day  Supported by Good morning, and welcome to The Node. I'm Daniel Kuhn, here to take you through the latest in crypto news and why it matters. In today's newsletter: Binance will automatically convert three rival stablecoins to BUSD, the final countdown to the Ethereum Merge has officially begun and DeFi giant Aave stopped loaning ether ahead of the Merge.   If you were forwarded this newsletter and want to subscribe, sign up here. And click here to unsubscribe.   – D.K. Today's must-reads Top Shelf Binance, Issuer of Third-Biggest Stablecoin, Stopped Supporting Larger Rival USDC: Binance announced it will automatically move customers' funds to its binance USD (BUSD) token from alternatives, including the larger USD coin (USDC), at the end of the month.  The decision was made for capital efficiency reasons, the exchange said. Users will still be able to deposit and withdraw USDC and other stablecoins on Binance, but will now have to use tether and BUSD as trading pairs, primarily.  USDT's $68 billion market value leads USDC's $52 billion, while BUSD is in third place at $19 billion.  The Final Countdown to the Ethereum Merge Has Officially Begun: The Bellatrix upgrade on Ethereum was activated on Monday, marking one of the final steps before the network officially switches from proof-of-work (PoW) to proof-of-stake around Sept. 13. The Ethereum Foundation requests node operators update their gear. The Bellatrix upgrade prepares Ethereum's PoS Beacon Chain – also called its Consensus layer – for the Merge with Ethereum's mainnet Execution layer. The next steps for Ethereum after the Merge will be to address scalability issues with sharding and rollups. Meanwhile, Ethereum Classic's hashrate and price have surged as miners and hucksters sell the idea of the continued relevance of a PoW-based Ethereum in a post-Merge world.  DeFi Giant Aave Stopped Loaning Ether Ahead of Ethereum Merge: The Aave community is worried that users may increasingly borrow ether ahead of the Merge (betting the news will increase the price of ETH), exposing the protocol to liquidity issues. Users voted overwhelmingly to "temporarily" pause ETH loans, cutting into a popular "utilization" trade involving ETH-staking service Lido.. Meanwhile, a wallet belonging to insolvent crypto hedge fund Three Arrows Capital has removed $33 million worth of staked ether (stETH) from a pool of decentralized exchange Curve.  Poolin, One of the Largest Bitcoin Mining Pools, Suspends Withdrawals From Wallet Service: PoolinWallet is suspending all withdrawals days after announcing liquidity issues on the world's fifth-largest bitcoin mining pool. The move is meant to prevent a run on assets and will be replaced with a "feasible" solution within a week, a post on the company's official Medium account said.  That plan might include debt, according to CEO Kevin Pan's post. – Xinyi Luo The Right Place for Your Crypto   Nexo marks the spot. As in the right spot for you to grow your crypto wealth and keep it secure.   Buy BTC, ETH, and more with your debit or credit card or swap between 300+ market pairs and get 0.5% in crypto rewards on each transaction.   If you're looking to enhance your spending power, Nexo is the right place. Borrow without selling your crypto at rates starting from 0% and grow your portfolio.   The right place brings you and your friends together and gives you both crypto rewards. Get $25 in BTC for every successful referral. Collect rewards as you go and enter the race for a $50 000 prize pool which will be distributed between the top 50 contestants. Enter the competition until July 26, 2022.   Timing the market can be a tall order. Choosing the right place is not. Grow your crypto on the highly-rated Nexo platform. Putting the news into perspective The Takeaway  Who Gains From Binance Converting USDC to Its Own Stablecoin? On Monday, Binance, the largest global crypto exchange by volume, announced it is killing access to three stablecoins that compete with its own dollar vehicle, Binance USD (BUSD). Binance said it's making the move to improve liquidity and capital efficiency on the exchange.    Beginning Sept. 29, Binance will automatically convert users' USD coin (USDC), Pax dollar (USDP) and trueUSD (TUSD) holdings into BUSD. Binance Pay, the exchange's payments service, will also stop supporting those coins on Sept. 12.   Binance is suspending spot, future and margin trading with the targeted coins, closing down all associated trading pairs. But users will apparently still be able to withdraw capital in USDC, USDP and TUSD – just not custody it directly on the exchange.    While those who say this is an overt power grab that raises novel antitrust questions have a point, it's hard to argue that BUSD isn't already popular. It's a viable alternative to the other U.S. dollar stablecoins. I'm going to quickly try to see it from Binance's point of view. Undoubtedly, liquidity conditions will improve on the exchange.  (Danny Nelson/CoinDesk)   BUSD is the third-largest stablecoin by market capitalization, and has increasingly been growing its share of stablecoin trading volumes ever since Binance eliminated trading fees for bitcoin (BTC) on its platform this summer.    Circle's USDC, the most important of the affected coins, is the second-largest stablecoin at a capitalization of about $52 billion. TUSD and USDP stand as the sixth- and seventh-largest stablecoins, capitalized at just over $1 billion and just under $1 billion, respectively.   As part of the move, Binance will also close access to its USDC-denominated saving accounts, decentralized finance (DeFi) staking services and loans. Counter-intuitively, Circle CEO Jeremy Allaire tweeted that the "converged dollar books on Binance ... is a good thing" for its stablecoin.   "Prediction: This move leads to a gradual net share shift from USDT to BUSD and USDC," Allaire tweeted, linking to a thread by Evgeny Gaevoy, the chief executive of trading platform Wintermute. (USDT, of course, is tether, the biggest stablecoin by issuance.)   Gaevoy's, and perhaps Binance's, argument is that this cuts out steps for USDC users who want to trade on Binance. People can still issue USDC as before, deposit it on Binance, do what they want to do and withdraw in USDC.    Meanwhile, there's friction for USDT traders, who still have to manually convert their assets – a "a T+1 process" that may cause it to lose "ground," Gaevoy said. Notably, exchange FTX has had automatic conversion of USDC, which has benefited market makers, he added.    All of this is fairly speculative and does raise questions about possible monopolistic behavior. Binance has cause to increase the utility of its BUSD stablecoin, issued by Paxos, but it would still cut into USDC trading volumes. If Binance's self-reported transaction volume is correct, the exchange is leaps and bounds ahead of competitors.   "[W]hile optimizing dollar liquidity on the world's largest exchange may carry benefits, the paradigm does raise potential market conduct questions," Circle told multiple publications.    But USDC will still be accessible on other major exchanges, perhaps weakening the case for antitrust action. Further, because the exchange is still offering USDC withdrawals, it presumably will be holding a massive USDC bag.    – D.K. Hex Trust is a fully licensed digital asset custodian for financial institutions and organizations. Our bank-grade platform Hex Safe™ integrates top emerging blockchains, token standards, and licensed custody services for NFTs and metaverse assets. Institutional-grade infrastructure: providing the highest standards of protection, scalability, and compliance Monetize digital assets: accessing DeFi, staking, and other on-chain services Enter the metaverse: integrating NFTs in your business operations safely Unlock the full potential of your digital assets. Get started Overheard on CoinDesk TV... Sound Bites "One of the big barriers to global scaling is the environmental impact that comes with proof-of-work. We see this as a barrier for global adoption."    – Prysmatic Labs co-founder and Ethereum Protocol Developer Preston Van Loon, discussing the Ethereum's upcoming Merge, on CoinDesk TV's "First Mover" Off-Chain Signals  What others are writing From tinkering with video games to building the new Ethereum: How Preston Van Loon became key to The Merge (The Block) Bridging DC and DeFi: Can crypto decentralize politics? (The Block) Here's what CZ says about Binance definitely not being Chinese (Protos) Crypto real estate: the property market built on digital assets (FT) Which institutes are most impacting the blockchain world? Tell us your thoughts in a five-minute survey. We're welcoming responses until Sept. 7. Take the survey here.   Web3 M&A Is Coming of Age With the Help of the Industry's Best   M&A deals: Alpha that too many overlook   Mergers and acquisitions (M&A) doesn't always get the love it deserves, but it should. Across the economy, M&A delivers huge value to everyone when it's done right. For strategically smart entrepreneurs and founders, it opens the door to sector-disrupting synergies of talents, intellectual property (IP) and revenue streams. For investors, it can be a stunning source of alpha and return on investment (ROI).   A recent report published by Bain earlier this year makes all this clear, highlighting that since 2014 the value of M&A deals worldwide has amounted to an absolute minimum of $3.6 trillion each year. In 2021, the total value of M&A deals hit $5.9 trillion, a record-breaking figure.   Continue reading here    *This is sponsored content from Acquire.Fi. The Chaser... The Node A newsletter from CoinDesk Were you forwarded this newsletter? Sign up here. See Previous Editions Copyright © 2022 CoinDesk, All rights reserved.  250 Park Avenue South New York, NY 10003, USA See all of CoinDesk's newsletters | Opt out

Market Outlook 🚀 - US Futures Down

Canadian interest rates to hit 4%

Inside.com Part of   Network September 06, 2022

US Markets Stock futures were down over the holiday weekend following a negative end to last week's trading. Stocks saw losses for the third consecutive week. The Dow was down 3% on the week, the S&P 500 lost 3.3%, and the Nasdaq dropped 4.2%.  The S&P 500 is also below its three major moving averages, which is often a sign of a potential upcoming crash.  The current 10 Year U.S. Treasury yield is set at 3.19880% Dow Jones  31,318.44 -1.07% S&P 500  3,924.26 -1.07% Nasdaq  11,630.86 -1.31% Russell 2000 1,809.75 -0.72% *Stock Market data as of the last closing bell. Data received directly from the reference indexes through ICE Data Services. Do you not understand any of these figures? Check out our explainer.

Canadian Markets Bank of Montreal predicts that interest rates in Canada will rise to 4% before the Bank of Canada considers changing its approach to fighting inflation. This claim comes as the housing market in Canada has shown signs of stabilizing, which could indicate that more tightening is required, the Bank of Montreal said. Bank of Montreal predicts a 75-basis point hike at the Bank's meeting on Wednesday. The Bank of Canada has already raised rates from 0.25% to 2.5% this year. TSX  19,270.85 0.67% *Canadian stock prices are as of the last close. Data received directly from the references indexes through ICE Data Services

European Markets Markets in Europe were down on Monday as investors remain concerned about energy shortages in the region. The Stoxx 600 lost 0.6% on Monday after recovering from a 1% drop earlier in the session.  The automotive industry was the worst performing after losing 4.8%.  The oil and gas sector was one of the few to finish in the green, gaining 2% on the day.  Euro STOXX 50  3,490.01 -1.53% UK (FTSE 100)  7,287.43 0.09% Germany (DAX)  12,760.78 -2.22% France (CAC 40) 6,093.22 -1.20% *European stock prices are as of 7 am ET. Data received directly from the reference indexes through ICE Data Services.

Asian Markets Stocks in Asia were down on Monday due to numerous market factors, including the devaluation of local currencies, high energy prices, and local economic data. China's Services Purchasing Manager's Index fell from 55.5 in July to 55 in August.  EV and tech stocks fell on Monday, causing the Hang Seng to sink. The Japanese government said it could decide to reactivate more nuclear plants to deal with energy supply issues.  S&P Asia 50 4,390.25 -2.20% Japan (Nikkei 225) 27,619.61 -0.11% South Korea (KOSPI) 2,403.68 -0.24% China (Hang Seng) 19,225.70 -1.16% India (SENSEX) 59,245.98 0.75% *Asian stock prices are as of 7 am ET. Data received directly from the reference indexes through ICE Data Services.

Commodities Commodity prices were up over the long weekend, with metals and other safe-haven assets seeing a significant rise.  Spot gold was up, while U.S. gold was even.  Spot silver, platinum, and palladium were up slightly over the weekend.  The supply of platinum has declined, both from mines and recycling, creating upward pressure in the market.  Gold (NYSEARCA:GLD) 159.26 0.88% Silver (NYSEARCA:SLV) 16.57 1.16% Corn (NYSEARCA:CORN) 26.61 0.68% Lumber (NASDAQ:WOOD) 74.34 -1.34% *Commodity prices are as of 7 am ET. Data from MarketWatch. To understand why investors track the prices of these commodities, click here.

Oil Oil prices were up over the weekend and on Monday.  The U.S. is refusing to agree to a nuclear deal with Iran, which diplomats claim most other Western countries had already agreed to. A lack of a deal would prevent Iranian oil from entering the market.  G7 countries agreed to cap the price of Russian oil exports. This means that the U.S., Canada, France, Germany, Italy, the U.K., and Japan will follow this cap. There are concerns about its effectiveness without the support of China and India.  OPEC+ agreed to cut production by 100,000 barrels per day starting in October.  Oil (NYSEARCA:OIL) 31.00 1.41% *Commodity prices are as of 7 am ET. Data from MarketWatch. To understand why investors track the prices of these commodities, click here.

Currency Exchange Rates The U.S. Dollar continued to rise over the weekend and on Monday, even with U.S. markets closed.  The U.S. Dollar Index hit 110 on Monday, a new 20-year high.  The Euro was also up as the U.K. Pound Sterling continued to fall, hitting a new 2.5-year low.  Investors are currently pricing in a 55% chance of a 75-basis point rate hike at the next Fed meeting.  UK(GBP) £0.87 -0.06% Europe (EURO) €1.01 0.24% Canada (Canadian Dollar) $1.31 0.08% Japan (Yen) ¥140.59 0.27% *Exchange rates as of 7 am ET. Data from Morningstar Financial Research. To understand why we track these currencies and the differences between them, click here.

Liam Gill is a founder, lawyer and investor. He previously founded Fumarii Technologies, which became a top 20 ranked cloud computing service (Yahoo Finance! 2019) valued at over $30M. He holds an LLB Laws (UK), MSc Management and Master of Laws and currently practices law in Vancouver, Canada.   Editor Eduardo Garcia is a writer and editor based in New York. He is the author of "Things You Can Do," an illustrated book about climate action. Bylines in The New York Times, The Guardian, Slate, Scientific American, and others. In one of his previous lives, Eduardo worked as a Reuters correspondent in Latin America for nearly a decade.

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