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Binance temporarily suspends USDC withdrawals

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Re: Binance temporarily suspends USDC withdrawals

#11

Post by xg15 »

mgaunard wrote: post #7
nailer wrote: post #4

What is BUSD and why does it affect withdrawals of an unrelated token?

BUSD is another stable coin pegged to USD, like USDT and USDC. What they're saying is that you can't withdraw USDC, but you can withdraw any of the other two.

The other two, which conveniently both have ties back to Binance.

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..."

Re: Binance temporarily suspends USDC withdrawals

#12

Post by madsbuch »

joyfylbanana wrote: post #9
Tenoke wrote: post #6

Earlier quoted context omitted.

~ Same thing as USDC but issued by Binance. They use them interchangeably in some cases since they themselves can also convert them 1:1 (both are worth 1$) just not immediately- e.g. if you have 100 busd you can straight cash that out as usdc and that might temporarily make it so they have less usdc than needed. People post when Binance have generic delays to withdraws for years in other forums and it's a non-story.…

I think what is interesting here is that they clearly don't have 1:1 USDC reserves. And as their compliance has been questioned by many in the past might be that they might not be able to convert large amounts of BUSD to USDC, not at least cheaply.

They do, Both USDC and BUSD are backed by actual dollars. Ie.

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.

Re: Binance temporarily suspends USDC withdrawals

#13

Post by 3np »

xg15 wrote: post #8

If their PAX/BUSD -> USDC conversion only works during the opening hours of that New York bank, wouldn't this be well-known to everyone who tried to convert to USDC in the past? As in, what "situation" are they talking about? Going only from their tweet, there is nothing out of the ordinary happening at all...

The idea would be that in the past their buffer of liquidity has been enough that they cover up without having to go to the bank between opening hours, and that recent surge in withdrawals (this would be the "situation") has now dried up that buffer.

Not speaking to how that reflects actual events, it's all consistent.

Re: Binance temporarily suspends USDC withdrawals

#14

Post by AdamN »

xg15 wrote: post #11
mgaunard wrote: post #7

Earlier quoted context omitted.

BUSD is another stable coin pegged to USD, like USDT and USDC. What they're saying is that you can't withdraw USDC, but you can withdraw any of the other two.

The other two, which conveniently both have ties back to Binance. 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..."

What's so weird about these stable coins is that there's no money to be made with them (for the end user). They're 'stable' so have no upside but they're non-redeemable when things aren't working and have a real probability of going straight to zero at any given moment.

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.

Re: Binance temporarily suspends USDC withdrawals

#15

Post by charcircuit »

xg15 wrote: post #11
mgaunard wrote: post #7

Earlier quoted context omitted.

BUSD is another stable coin pegged to USD, like USDT and USDC. What they're saying is that you can't withdraw USDC, but you can withdraw any of the other two.

The other two, which conveniently both have ties back to Binance. 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..."

>The other two, which conveniently both have ties back to Binance.

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.

Re: Binance temporarily suspends USDC withdrawals

#16

Post by joyfylbanana »

madsbuch wrote: post #12
joyfylbanana wrote: post #9

Earlier quoted context omitted.

I think what is interesting here is that they clearly don't have 1:1 USDC reserves. And as their compliance has been questioned by many in the past might be that they might not be able to convert large amounts of BUSD to USDC, not at least cheaply.

They do, Both USDC and BUSD are backed by actual dollars. Ie. 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.

Probably not dollars, but some kind of low-risk assets like USD bonds? In that case you also can't just withdraw dollars, you have to sell the bonds - if they have to convert large amount like hundreds of millions, the spread on those bonds might get larger.

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.

Re: Binance temporarily suspends USDC withdrawals

#17

Post by LatteLazy »

xg15 wrote: post #11
mgaunard wrote: post #7

Earlier quoted context omitted.

BUSD is another stable coin pegged to USD, like USDT and USDC. What they're saying is that you can't withdraw USDC, but you can withdraw any of the other two.

The other two, which conveniently both have ties back to Binance. 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..."

What are the ties between Binance, and Circle/Tether?

Re: Binance temporarily suspends USDC withdrawals

#18

Post by jacquesm »

AdamN wrote: post #14
xg15 wrote: post #11

Earlier quoted context omitted.

The other two, which conveniently both have ties back to Binance. 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..."

What's so weird about these stable coins is that there's no money to be made with them (for the end user). They're 'stable' so have no upside but they're non-redeemable when things aren't working and have a real probability of going straight to zero at any given moment. 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 sen…

If you follow the money it makes perfect sense. After all, after converting to your 'internal stable coin' you can claim you have the reserves and you're free to spend the original coins in the real world. Right up to the moment that everybody wants their money back and it turns out that your stable coin was worthless.

Re: Binance temporarily suspends USDC withdrawals

#19

Post by charcircuit »

AdamN wrote: post #14
xg15 wrote: post #11

Earlier quoted context omitted.

The other two, which conveniently both have ties back to Binance. 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..."

What's so weird about these stable coins is that there's no money to be made with them (for the end user). They're 'stable' so have no upside but they're non-redeemable when things aren't working and have a real probability of going straight to zero at any given moment. 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 sen…

Why do people hold cash instead of having all of their money invested? Stablility is a feature. People want a stable store of value that is on chain.
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