The CEO of Binance Exchange announces the conversion of the recovery fund from BUSD to other cryptocurrencies
The failure of three major cryptocurrency-supporting banks, Silicon Valley Bank (SVB), Silvergate Bank and Signature Bank, caused the stablecoin (SVB) to drop.USDC) to reach $0.87 instead of settling at the basic standard of $1.
Amid mounting concern about stablecoins, chirp Binance CEO and co-founder Changpeng Zhao (CZ) said on March 13 that following “changes in the stablecoin and banking space,” the company will convert the remaining $1 billion in the industry recovery fund into another “native cryptocurrency.” .
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
The original cryptocurrencies listed by Changping Zhao (CZ), Bitcoin (BTC) and Binance Coin (BNB) and ethereum (ETH)He then posted the transaction ID links for Bitcoin and Ethereum, and said the $980 million amount took 15 seconds to move and the transaction fee was only $1.98.
The crypto community on Twitter had a mixed reaction to the move by the Binance co-founder, with some hailing the decision as “pure gold” and suggesting the use of altcoins to peg stablecoins:
This move is pure gold. Crypto power.
🤔 – 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.
– Vipul CypherPunk (@vipul19) March 13, 2023
However, many other users They doubted With the move the company took, it sold BUSD, which is supposed to be a stablecoin, and turned it into a more “volatile” asset.
And on March 10, Circle, the company behind USDC, revealed that it had about $3.3 billion frozen in the recently collapsed SVB Bank, which caused the initial unpegging. However, by the 13th of March, USDC had risen again to its normal limit of $1, but currently the currency is hovering in the $0.99 range.
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Circle is also known to have an undisclosed amount of reserve funds stuck in Silvergate, another US-based crypto-friendly bank that also just went bankrupt.
It is worth noting that the instability surrounding USDC created a domino effect for other stablecoins such as DAI, USDD and FRAX, which also retreated from their base $1 benchmark.
Since events began to unfold on March 10, the entire crypto space has been dying to know what happens next, with users in the Twitter community claiming that there is “no one left to fund cryptocurrency companies.”
