A few days ago, Binance launched BUSD Auto-Exchange, a new feature that automatically converts all existing USDC, USDP, and TUSD balances to BUSD at a 1:1 ratio.

This move is to benefit users and protect users.

Today, the cryptocurrency market has a large selection of stablecoins.

Some stablecoins are backed by real-world assets such as fiat and gold, while some are backed by cryptocurrencies.

Many networks have their own stablecoins or collaborate with stablecoin partners.

For example, BUSD uses the Binance logo, but is actually issued by Paxos.

The growing selection of stablecoins has left trading platforms with no choice but to distribute liquidity among a large number of trading pairs.

Let’s take Bitcoin as an example. Before the exchange, Binance had five Bitcoin stablecoin trading pairs.

Suppose each trading pair is a water glass, and the water in each glass represents liquidity.

Essentially, BUSD auto-swap puts all existing liquidity in USDC, USDP, and TUSD into one cup, BUSD.

From an operational point of view, this step is logical.

Increased stablecoin liquidity will consolidate volume; as such, all BUSD trading pairs will enjoy faster order matching, better pricing, and tighter slippage spreads.

This saves users money and time and creates a more stable trading environment.

Finally, a word of caution: users can still use their favorite stablecoins, including USDC, USDP, and TUSD, to enter and exit the Binance platform.

Binance’s goal is to increase liquidity and provide its users with better prices and faster order execution.

Users can still deposit and withdraw other stablecoins. Technically, this move will not drive more users to BUSD (or increase BUSD usage).

Go to Binance’s Official Website