Binance Converts a Billion Dollards of BUSD into BITCOINS

13 mars 2023

Bitcoin, more reliable than stablecoins - The situation appears to be calming down in the Bitcoin (BTC) and crypto markets, and even improving. However, trust in stablecoins is more precarious than ever before. Who would have thought that even Circle's USDC could lose its peg to the US dollar? In the face of these concerns, Changpeng Zhao, CEO of Binance, is taking the lead and converting the exchange's reserve fund into real cryptocurrencies, including Bitcoin.

WHEN BITCOIN (LOGICALLY) BECAME A SAFER BET THAN STABLECOINS

Faced with the loss of the USDC stablecoin's peg to the dollar over the weekend, many may have hastily tried to convert it to fiat currency. But evidently, others turned to Bitcoin instead. In fact, the king of cryptos hardly budged at first during the USDC's difficulties, then BTC's price exploded by +10% in the last 24 hours.

This preference for real cryptocurrencies over stablecoins was evident in Changpeng "CZ" Zhao, the founder and CEO of the crypto exchange Binance. In a tweet posted on his official account on Monday, March 13, 2023, the CEO announced that he would be converting $1 billion worth of BUSD stablecoins into cryptocurrencies - specifically, Bitcoin, Ether (ETH), and BNB.

"Given the disruptions within stablecoins and banks, Binance will convert the remaining funds of the $1 billion BUSD Industry Recovery Initiative into native cryptocurrency, including BTC, BNB, and ETH. Some fund movements will occur on-chain (on the blockchain). Transparency."

A $1 BILLION TRANSFER IN SECONDS FOR $1? IT'S POSSIBLE WITH BLOCKCHAIN

As soon as it was announced, it was done. Just a few minutes after the announcement - and while traditional bankers were still asleep CZ announced that the first transaction had already been completed. As the Binance CEO noted, it took "15 seconds and cost $1.29" to transfer $985 million in BUSD. And all of this on an early Monday morning, before banks opened.

It is worth noting that Binance's Industry Recovery Initiative fund, announced in the wake of the FTX bankruptcy disaster, is an initiative to revive the crypto sector. This fund aims to address the occasional (but dangerous) liquidity crises that crypto actors may face.

Would Binance play the role of "central bank" of cryptocurrencies? Or at least, would it be inspired by it? In any case, yesterday - on a Sunday no less - the US Federal Reserve (the Fed) also released a $25 billion fund to prevent general banking contagion from the liquidity crisis of Silicon Valley Bank (SVB).