Unsurprisingly, the crypto markets have gone green in response.
Binance Chief Executive Officer Changpeng Zhao, aka CZ, has disclosed that the crypto exchange would be converting the balance of its $1 billion Industry Recovery Initiative fund from Binance USD to Bitcoin, BNB, and Ethereum.
The Binance chief revealed this in a Twitter thread today, citing heightened uncertainty over dollar-pegged stablecoins and banks in the United States.
Given the changes in stable coins and banks, #Binance will convert the remaining of the $1 billion Industry Recovery Initiative funds from BUSD to native crypto, including #BTC, #BNB and ETH. Some fund movements will occur on-chain. Transparency.
— CZ 🔶 Binance (@cz_binance) March 13, 2023
In a follow-up tweet, CZ disclosed that the leading crypto exchange has already started the process by moving about 980 million BUSD to Binance. According to the Binance chief, the transaction took only 15 seconds with a $1.29 fee, sharing the transaction data.
Notably, Lookonchain, a blockchain analytics firm, also confirmed the transaction.
— Lookonchain (@lookonchain) March 13, 2023
As surmised by CryptoQuant Chief Executive Officer Ki Young Ju, the move places a whopping $1 billion buying pressure on the cryptocurrencies outlined by the Binance chief.
— Ki Young Ju (@ki_young_ju) March 13, 2023
Unsurprisingly, the crypto markets have gone green in response. BTC, BNB, and ETH are posting over 9% gains in the last 24 hours, with BTC surging as high as $22.7k before paring gains to trade for just over $22.5k at the time of writing.
As highlighted above, the latest move follows the uncertainty around stablecoins and crypto-facing banks in the U.S. About a month ago, regulators ordered Paxos to cease BUSD issuance, with the U.S. Securities and Exchange Commission (SEC) alleging it is a security in a potential enforcement action. In addition, in recent weeks, we have seen a string of crypto-friendly banks collapse.
Over the weekend, in a now-deleted tweet, the Binance chief speculated that there could be a coordinated attempt to shut down crypto-friendly banks in the U.S.
Recall that in the wake of the FTX collapse, crypto community members have speculated that the U.S. government is moving to shut the nascent market out from the banking industry and much-needed access to USD. A joint statement by the Fed, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation discouraging banks from working with crypto firms has only fueled these speculations.
Binance launched the industry recovery fund initiative last year as a backstop for otherwise healthy firms facing liquidity crunches after the FTX collapse to limit the contagion.