Analysts from investment bank JPMorgan are of the opinion that Binance’s decision to covert certain stablecoins to its BUSD and Tether (USDT) will benefit Tether.
Based on the inference of these analysts, Tether’s level of importance in the crypto trading industry will increase. Especially now that the investment bank believes it is obvious that the value of the stablecoin by market capitalization is declining.
“In our opinion, this decision is likely to bolster the importance of Tether in the stablecoin universe which had been under threat by USDC,” the analysts wrote.
About a week ago, the world’s largest cryptocurrency exchange by market cap Binance announced that it would soon discontinue trading of the United States pegged dollar stablecoin USD Coin (USDC), USDP Stablecoin (USDP), and TrueUSD (TUSD) on its platform.
Specifically, from September 29th, any existing deposits of these three stablecoins will be auto-converted to Binance stablecoin (BUSD).
No Plans to Auto-Convert Tether Yet
Markedly, they will be converted at a 1:1 ratio over a period of 24 hours. Likewise, every trading pair of these halted stablecoins against BUSD or Tether or even other cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) will be suspended. Per a statement issued by Binance, there is no plan to auto-convert Tether to BUSD, although the plans may likely change along the line.
“We do not have plans to auto-convert USDT to BUSD as of now, but may change,” a spokesperson for Binance said.
This spokesperson also mentioned that this autoconversion is not a temporary procedure but one which will continue.
In addition to all of these, there was a decision to temporarily suspend Ether and Wrapped Ether (wETH) deposits and withdrawals on selected networks until the Merge which happened in the early hours of Thursday. Binance made this decision to boost liquidity and capital efficiency for its users.
Tether is the largest stablecoin by trade volume and is live across eleven different blockchains. When compared to USDC’s eight blockchains, there is a significant difference. Conversely, Tether’s average daily trading volume is about ten times higher than that of USDC.
Hence, the speculation by JPMorgan’s analysts as regards the prospective level of importance which is about to be accorded Tether as of September 29th.