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Binance CEO has announced that the exchange will convert $1 billion Industry Recovery Initiative funds to native cryptos such as BTC, ETH, and BNB from BUSD.
Binance co-founder and CEO, Changpeng “CZ” Zhao announced on March 13 that owing to the stablecoins and bank changes, it will convert $1 billion of its BUSD into native crypto. These native cryptos will include ether, bitcoin, and BNB.
CZ then added links to the BTC and ETH transactions hash ID and wrote that $980m took 15 seconds to transfer at a $1.29 fee.
Given the changes in stable coins and banks, #Binance will convert the remaining of the $1 billion Industry Recovery Initiative funds from BUSD to native crypto, including #BTC, #BNB and ETH. Some fund movements will occur on-chain. Transparency.
— CZ 🔶 Binance (@cz_binance) March 13, 2023
After the announcement, the market experienced buying pressure. Bitcoin traded above the $22.5k mark, ETH crossed $1,600, and BNB hit $300, surging 10% to its new two-week highs.
Meanwhile, the Twitter announcement was met with mixed reactions on the platform. One user said the move was pure gold and offered advice on considering stablecoins over-pegged to USD. Further, the user mentioned considering global currencies and CBDCs integration to help reach the unbanked.
This move is pure gold. Crypto power.
— Vipul CypherPunk (@vipul19) March 13, 2023
🤔 – How about diversifying into stables other than pegged to USD?
For now allow major global currencies and maybe integrate with CBDCs to allow seamless integration in the future.
It will help in reaching out to a huge unbanked users.
Other users said that selling the BUSD was a rug pull and called out users applauding the move.
Thoughts? pic.twitter.com/DMlkOi6kpu
— S.O.H. (@SonsOfHexico) March 13, 2023
The move comes just days after regulators shut down Signature Bank, leaving the crypto market trading red. Regulators also shut down Silvergate Bank earlier last week, followed by the Silicon Valley Bank(SBV) collapse on Friday night, leading to investors withdrawing their shares to protect their capital.
Circle’s USDC shortly after depeged after announcing $3.3 billion of its funds were still in SBV. Meanwhile, the company also announced it had some of its reserve funds on Silvergate. USDC’s instability led to other stablecoins slipping from their peg briefly before stabilizing at $1 again, such as USDD, DAI, and FRAX.
These activities have led to Crypto Twitter raising concerns in the crypto market. Scott Melker, a crypto investor going by The Wolf Of All Streets, mentioned that the banks collapsing left the crypto companies without a means of banking basically.
Silvergate, Silicon Valley and Signature all shuttered.
— The Wolf Of All Streets (@scottmelker) March 12, 2023
Depositors will be made whole, but there’s basically nobody left to bank crypto companies in the US.
Blockchain Association’s head of crypto policy promoter, Jake Chervinsky, mentioned the banks’ closure brought a “huge gap” in the crypto market for friendly banking options.