Binance US, the American version of the popular cryptocurrency exchange Binance, has made changes to its terms of use that effectively block fiat currency (USD) withdrawals. The new terms state that if you wish to withdraw USD funds, you must first convert them into stablecoins or other digital assets before withdrawing them. This comes after Binance US suspended dollar deposits in June and warned that withdrawals would also be suspended.
It’s important to note that Binance US is a separate company from Binance and operates independently. However, there are suspicions that it may still be controlled by Binance. Despite this, if Binance US were to face bankruptcy, it would not affect Binance.com.
Binance US has been facing difficulties with US authorities, resulting in a decline in its daily trading volumes. While Binance.com remains strong with over $6 billion in trading volume, Binance US has fallen below $20 million and is now surpassed by competitors like Gemini and Binance TR.
The suspension of USD withdrawals on Binance US does not apply to stablecoin withdrawals. Users are advised to convert their USD to stablecoins before withdrawing. While stablecoins cannot be banked like USD, users can transfer them to other exchanges where they can be exchanged for fiat currency and withdrawn.
It is possible that Binance US is looking to exit the US market due to the challenges it faces and the strong competition from exchanges like Coinbase. Incentivizing the use of other exchanges may be a way for them to transition away from the US market.
However, there are risks associated with using stablecoins. Stablecoins are typically issued by centralized entities and are not decentralized cryptocurrencies. If the issuer of a stablecoin performs poorly or fails, the value of the stablecoin can be lost. For example, when Silicon Valley Bank failed, the stablecoin USDC lost its peg to the dollar.
In conclusion, Binance US has implemented restrictions on USD withdrawals, prompting users to convert their funds to stablecoins before withdrawing. This move may be a sign that Binance US is looking to exit the US market due to regulatory challenges and competition. However, users should be aware of the risks associated with stablecoins, as they are issued by centralized entities and can lose value if the issuer fails.
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