Binance CEO Announces Conversion of BUSD Recovery Funds to Native Crypto

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The failure of three major crypto-friendly banks Silicon Valley Bank (SVB), Silvergate Bank and Signature Bank has caused the stablecoin USD Coin (USDC) to fall to $0.87 from its $1 peg.

Amid growing concern around stablecoins, Binance co-founder and CEO Changpeng CZ Zhao tweeted on March 13 that with the changes in stablecoins and banks, the exchange will convert leftover funds from $1 billion in its native crypto industry recovery initiative.

Given the changes in stablecoins and banks, #Binance will convert the remaining $1B Industry Recovery Initiative funds from BUSD to native crypto, including #BTC, #BNB, and ETH. Some fund movements will occur on a chain. Transparency.

CZ Binance (@cz_binance) March 13, 2023

Native cryptocurrencies listed by CZ included Bitcoin (BTC), BNB (BNB), and Ether (ETH). He then posted links to the hash ID for BTC and ETH transactions, saying $980 million took 15 seconds to move with a transaction fee of $1.98.

In response to the Binance co-founder’s decision, Crypto Twitter had mixed reactions. Some hailed the decision, calling it pure gold, and suggested using alternative currencies to peg stablecoins:

This movement is pure gold. cryptographic power.

– What would you say to diversifying into stables other than pegged to the USD?

For now, allow major global currencies and perhaps integrate with CBDCs to enable seamless integration in the future.

This will help reach a large number of unbanked users.

Vipul CypherPunk (@vipul19) March 13, 2023

However, others questioned the decision to sell the Binance USD (BUSD) stablecoin and convert the fund into more volatile assets.

On March 10, Circle, the company behind USDC, disclosed that it had approximately $3.3 billion tied up by the failing SVB, which caused the initial unpecking event. However, on March 13, the USDC had bounced back towards its $1 anchor currently hovering around $0.99.

Related: Breakup: Silicon Valley Bank UK arm acquired by HSBC for £1

Circle also has an undisclosed amount of reserve funds tied up in Silvergate, another US-based bank that failed.

The instability surrounding USDC caused a domino effect on other stablecoins such as Dai (DAI), USDD and FRAX, which also slipped from their $1 parity.

Ever since events began to unfold on March 10, the crypto space has been aware of what will happen next. Twitter users have claimed that there is no one left for banking crypto companies.

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