What is BUSD and why does it affect withdrawals of an unrelated token?
People post when Binance have generic delays to withdraws for years in other forums and it's a non-story. I imagine it only made it on the front page because people think it means more than it does.
1. Burn 1 BUSD
2. Withdraw that 1 dollar
3. Deposit it with the USDC account
4. Mint one USDC
However, that requires that banks are open.
Also even though it were just dollars in a regular bank account, when the amounts go large enough, the bank might have liquidity issues of their own.
What would be the biggest issue is the compliance. As rumours are circulating that Binance might be getting some kind of charges, the banks and other institutions might just stop doing business with them because that would increase their risk a lot.
100MM isn't nothing, but it's very much moveable. Bond markets trade absolutely massive size. Even hen you could tell people "hey, you can't get your USDC, but we're trading out of positions over the next two weeks". Sucks but drastically different than an FTX situation.
> It is important to understand the distinction between BUSD and Binance-Peg BUSD. These are two different products. Binance USD (BUSD) is a regulated, fiat-backed stablecoin pegged to the US dollar. The Paxos-issued BUSD stablecoin, as well as its reserves, are subject to strict regulatory oversight by the New York Department of Financial Services. BUSD is backed by reserves held in either or both (i) fiat cash in dedicated omnibus accounts at insured U.S. banks and/or (ii) U.S. Treasury bills (including through repurchase agreements and/or money-market funds invested in U.S. Treasury bills).
> Binance-Peg BUSD, which is not issued by Paxos and is not regulated by NYDFS, is a separate product. Binance independently mints Binance-Peg BUSD on other blockchains (e.g., BNB Chain, Polygon and Avalanche) and pegs the tokens to BUSD on a one-to-one basis. This allows holders of both tokens to swap tokens between Ethereum and other blockchains.
Likewise if something happened to the value of BUSD, it should be fine, because you hold USDC. Except you don't because Binance replaced the coins they were supposedly holding in custody for you.
If Binance had USDC reserves they would not need to burn BUSD
Yes, that is a mistake, trust in Circle is not the same as trust in binance
> service of treating the currencies as the same
Replacing customer’s investments is not a service, particularly if it makes it more difficult to withdraw the currency.
That’s alarming. People purchased a coin backed by Circle and got a coin backed by an unrelated company.
If BUSD is a “safe” stable coin backed by real, liquid, currency in a binance bank account (lots of IFs), it might make more sense as accounting than storing it as USDC stored in another company’s bank account, in that other company’s country. If that company makes bad decisions, it could impact binances customers. Especially after FTX and prior stablecoin fiascos, storing customers funds in your own bank seems prudent.
If binance can soft-real-time mint USDC during bank hours, then any conversion can be done by a regular-banking wire transfer. All they need is some pre-minted reserves for off-hours.
Orrrrrrr they’re playing games with customers funds and hiding it in their own coffers. In which case BUSD is backed by a lie. FTX is familiar.
Or they have spent it or given it out in bad loans.
FTX did something similar, though they just auto-converted them to and from fiat USD (again, notably, not applying this policy to Tether).
What they're saying is that you can't withdraw USDC, but you can withdraw any of the other two.
It feels a bit like saying "Unfortunately, converting Facebook Dollars to Apple Dollars is currently not possible due to minor technical difficulties. However, you can still easily convert to Oculus Dollars or Instagram Dollars..."
I'd get it for some volatile coin where the risk is potentially worth it but holding these for more than a few days for clearing (?) doesn't make sense to me.
http://news.bbc.co.uk/onthisday/hi/dates/stories/september/1...
That's an interesting way of spinning the pound falling out of the ERM (which wasn't the same as the Deutschmark). From the perspective here, getting out of the ERM was a blessing, not a "failure".
And at no point did a paper pound cease to be exchangeable with hard currency. So I stand by my earlier remark.
The implication that this £20 note is not actually £20. But ten £2 coins is coin-of-the-realm, and coin is what you can expect the Governor to hand over when you go to cash-in the promise.
> What's so weird about these stable coins is that there's no money to be made with them (for the end user).
Doesn't tell the whole story - it is possible to seek returns from owning stable coins.
So what? USDT is currently worth marginally more than USDC. Buy some Oculus dollars and trade with someone else for your Apple dollars if you want Apple dollars so badly.
Didn't want to introduce another conspiracy theory here...