Binance and stablecoins. In the space of just a few months, the publication of proof of reserve by cryptocurrency platforms always gives rise to diverse and varied interpretations on the part of observers and the specialist press. But when it’s the world’s number one that gets involved, it always takes on a different dimension and inevitably triggers reactions. The state of his reserves is closely scrutinized by those who see it as confirmation of the solidity of CZ’s business, as well as by those who look for signs of weakness. Today, it’s the management of stablecoinsparticularly theUSDCwhich attracted a lot of comment. We take stock of the Binance, and we tell you more about the latest controversy.
Binance continues to be transparent about its cryptocurrency reserves…
The proof of reserve (PoR) is a new industry standard which came into being after the calamitous episode of the FTX bankruptcy. Tired of so many lies, users doubted the reliability of all crypto platforms. The major players therefore sought – and found? – a way to calm things down, by regularly publishing the status of their cryptocurrency reserves. And while this may not be a panacea, it does have the merit of existing and resembling the beginnings of transparency. This proof of reserve is presented in the form of various tables displaying the crypto list inmates and the number of tokens correspondents.
But more interestingly, it can also be found as a ratio between cryptocurrencies belonging to users and theexchange. This lets you know at a glance whether it could virtually cash a bank run. Here’s one from Binance, published a few hours ago:
As you can see, there’s not much to say, and Binance has a good enough cryptos to cover large withdrawals. We note in passing that largest reserves concern the BUSD and the NBB, which are both in-house products, as well as the stablecoin USDT. And we’re going to talk about it now.
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… and triggers some questions about its stablecoin management
Because stablecoins is the precise point at which prompted a few reflections to Binance from commentators. To get a better idea of the decisions taken by CZ teams in recent months, turn to the following table:
If you take a closer look, you’ll notice that the USDC balance held by Binance rose from 3.48 billion of dollars to just $23.9 million. So what happened between March 1ᵉʳ and May 1ᵉʳ this year? The answer is the collapse of the Silvergate bankwhich was supposed to house a large part of Circle’s reserves, and therefore of the USDC.
In fact, at the same time as Binance was disposing of these USDCs, it also increased in the same proportions its BTC and ETH reservesas shown in the chart. It’s only a short step from saying that Binance was scared. Having said that, they’re not the only ones to have been in a cold sweat at the time3
This episode was even commented on by Brian Armstrongwho recently ironized that these movements had had no real impact on its finances. So, what is Binance accused of? Swapping $3 billion in USDC – which were at a disadvantage at the time – for BTC and ETH? That would seem to be a wise decision. But whatever Binance does, there’s always the shadow of FUD hanging over social networks. But I’m sure that you already know CZ’s answer.
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