In the wake of recent banking challenges, Binance.US seized the opportunity to revolutionize its trading framework: the crypto-exchange coupled up with MoonPay, a crypto payments firm, substituting the US dollar-linked stablecoin, Tether (USDT), for all transactions, commencing August 22. However, the journey wasn’t entirely seamless, as Binance.US had to navigate through a rocky period that began with a cessation of fiat deposits in early June.
When fiat deposits were halted, Binance.US took a bold step into the future by replacing the traditional USD with USDT, a move that transformed the platform into an exclusively cryptocurrency-based exchange. This was facilitated by the debut of the ‘Buy & Sell Crypto With USDT’ feature on the Binance.US mobile app, granting users the liberty to trade in over 150 different cryptocurrencies. The user-friendly feature is set to expand, with plans for website integration in the pipeline.
Efforts have also been exerted to streamline the process of funding user accounts with USDT. To this end, Binance.US collaborated with third-party payment entities such as MoonPay. Users now have the option to fund their USDT balance via user-friendly USD on-ramps, process USDT deposits, or exchange other cryptocurrencies for USDT. Integrating MoonPay into the platform has made these transactions more accessible, incorporating payment options such debit and credit card, Apple Pay, and Google Pay to purchase USDT. Users can sell USDT and withdraw USD via bank transfers.
Meanwhile, trouble was brewing on the legal front. Binance.US, under scrutiny from the US Securities and Exchange Commission (SEC) for supposed regulatory infringements, had to grapple with the termination of essential payment avenues by banking affiliates who had grown wary of the SEC’s agenda.
In order to ensure the platform’s and customers’ security, Binance.US suspended fiat withdrawals from June 13, 2023. A week prior, the platform discontinued the acceptance of US dollar deposits and removed USD trading pairs, signaling its tactical retreat from traditional financial systems. Surplus dollar balances were allowed to be converted into the stablecoin for withdrawal on-chain. As a result, Binance.US delisted ten trading pairs, mostly involving Bitcoin and Binance USD, on June 8.
While Binance.US’s shift from USD to USDT opens a new chapter in crypto trading, it raises questions regarding the sustained confidence in traditional banking and the burgeoning dominance of digital currencies. Whether this audacious move will pay off in the long run remains to be seen.