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Binance has confirmed plans to convert $1 billion worth of Binance USD (BUSD) from its industry recovery initiative into local crypto assets including bitcoin, ethereum and BNB.
In a tweet on Monday, Binance CEO Changpeng Zhao said the world’s largest cryptocurrency exchange plans to convert the remaining $1 billion of its Industry Recovery Initiative fund into BTC, BNB and ETH. They said:
“In view of the transition to stable coins and banks, Binance will convert the remaining $1 billion of Industry Recovery Initiative funds from BUSD to native crypto, including BTC, BNB and ETH. Some fund movements will be on-chain. Transparency.”
The crypto boss confirmed that the transaction was successful in a subsequent tweet. blockchain data shows The transaction took 5 seconds and cost only $1.29. “Imagine moving $980 million through a bank before banking hours on Monday,” CZ said.
This move has clearly contributed to the buying pressure, pushing the top cryptocurrency higher. According to data from CoinGecko, BTC, ETH, and BNB are all up about 8% in the past 24 hours.
Back in November, Binance announced that it is setting up an industry recovery fund to help rebuild the industry. At the time, Tron founder Justin Sun said that Tron, Huobi Global and Poloniex supported the initiative.
The move also comes in the wake of Paxos, the owner and issuer of BUSD, being hit by a lawsuit from the United States Securities and Exchange Commission (SEC), after the agency last month claimed the firm violated investor protection laws. . Paxos announced that it will stop minting BUSD and “terminating its relationship with Binance.”
Panic over health of US banks hurts USDC stablecoin
A $1 billion conversion of BUSD into the leading cryptocurrency took place amid the banking crisis that rocked the United States banking sector over the weekend.
On Friday, Silicon Valley Bank, one of the most popular lenders to Silicon Valley tech and growth startups, failed after suffering a bank loan. Subsequently, the Federal Deposit Insurance Corporation (FDIC) took control of the bank and created the Deposit Insurance National Bank of Santa Clara, which now holds SVB-insured deposits.
While venture capital firms and tech startups were among the worst hit by the collapse of the Silicon Valley bank, some prominent crypto companies have also disclosed risks to the bank. For one, the USDC issuer is owned by Circle. $3.3 billion of your USDC reserves at the collapsed lender.
The news initially caused a wave of withdrawals and redemptions that boosted USDC. draw distance From your target peg of $1. However, the stablecoin has mostly recovered its losses over the past day, rising to around $0.99 at the time of writing.
Notably, Binance has also suspended the auto-conversion of USDC to BUSD due to current market conditions, “specifically related to higher flows and increased burden to support conversions,” the platform said. Said in a tweet late Friday night.
Meanwhile, CZ once again pushed the idea of crypto-backed stable coins, claiming that “banks are at risk for fiat-backed stable coins.” He said that Do Kwon had the right idea but failed to execute it.