Panic has gripped the Terra and wider stablecoin ecosystem for the past two days. While the UST has yet to re-establish parity with the dollar, and the LUNA has fallen as low as $0.01, the consequences are being felt elsewhere. The Binance platform has thus delisted the LUNA/USDT futures contract… In favour of the LUNA/BUSD pair
LUNA: Binance abandons USDT in favour of BUSD
The move is symbolic of the uncertainty currently surrounding stablecoins, following the collapse of the Terra project and its associated tokens. We have just learned that the Terra blockchain has been officially shut down, which has only reinforced the doubts of the crypto-community.
As a result, non-algorithmic stablecoins, which work very differently from UST, have been affected. This is certainly what happened to Tether (USDT). Despite being backed by a basket of assets, the stablecoin saw its value hit $0.95 on the day, before recovering to $0.99:
USDT stalls for a few hours
Conversely, other stablecoins posted gains above $1 on a highly volatile day, a sign of an exodus of users to cryptocurrencies deemed more secure.
And exchange Binance also seems to have noticed the trend, as it announced today that LUNA/USDT futures would be delisted:
As mentioned previously, Binance Futures will conduct an automatic settlement on the $LUNA USDT-Margined Contract and then delist the Futures contract at May 12, 2022 3:30pm UTC.https://t.co/774JF0HcqP
– Binance (@binance) May 12, 2022
A few hours earlier, the platform had warned that if the price of the LUNA/USDT contracts fell below 0.005 USDT, it would proceed with this delisting.
What is notable, however, is that Binance announced in the same press release that it will launch LUNA/BUSD futures contracts. As a reminder, the BUSD is Binance’s stablecoin. It is backed by dollar reserves, as well as by US Treasury bills.
This is a sign of an ongoing shake-up in the stablecoin sector. Considered to be a safe bet in the cryptocurrency space, they carry considerable weight. If they falter, the entire market becomes concerned. We’re still in the middle of the story, but it’s possible that the regulatory repercussions will be particularly severe.
