During Coinbase's second-quarter earnings call, CEO Brian Armstrong made comments about USD Coin (USDC) that raised some eyebrows. He noted that despite Binance moving some funds from USDC to another stablecoin, USDC's market cap remained unchanged.
Armstrong mentioned, "Binance actually moved some of the funds out of USDC and into another stablecoin. I think USDC's market cap has discounted that based on our data over the last six or seven weeks. So that's an important data point." USDC is Coinbase's preferred stablecoin, and the exchange is part of a consortium that owns it. However, it appears that Binance has shifted most of its USDC holdings to other stablecoins.
Though there hasn't been official confirmation from either Coinbase or Binance, on-chain data suggests that Binance has been converting USDC to US dollars, possibly indicating a move towards its new preferred stablecoin, First Digital USD (FDUSD). Binance has previously con vertical USDC into other stablecoins; in September 2022, it automatically converted USDC held by users into Binance USD (BUSD), a stablecoin issued by Paxos Trust Company.
Binance has been seeking a new stablecoin after regulatory actions against its previous choices. It initially adopted TrueUSD (TUSD), but with TUSD's depegging and cessation of issuance, Binance has turned to FDUSD. This relatively new stablecoin, issued by a Hong Kong -based The company, has gained attention due to Binance offering trading pairs and zero transaction fees for it.
The rise of FDUSD has been notable, even catching the attention of Paolo Ardoino, Tether's CTO, who pointed out its significant growth while suggesting Tether and USDC might be under pressure. Despite being the second-largest stablecoin by market share, USDC has seen a decline in its market capitalization over the past year, dropping from $44.5 billion to $26 billion as of now.
