• Binance ended zero-fee trading for top BTC pair BTC/TUSD, stirring memories of the 90% volume crash in March.
  • Binance appears to be reducing TUSD support despite BTC/TUSD being a leading pair.
  • Sneak Peek 3: Critics say Binance’s policy changes cause market instability.

Cryptocurrency exchange Binance recently announced it will modify its popular zero-fee Bitcoin trading program, ending free BTC/TUSD trades starting September 7th. While zero fees remain for BTC/FDUSD, Binance is discontinuing the incentive for one of its largest BTC pairs.

In March, when Binance halted zero-fee BTC/BUSD trades in favor of the lesser-used TUSD pair, overall trading volumes crashed by 90%. Now, with TUSD losing its zero-fee status as well, many worry history could repeat itself.

Is Binance reducing TUSD support?

Binance is seemingly reducing support for TUSD amid general stablecoin concerns. However, TUSD and USDT represent Binance’s highest-volume BTC pairs after BNB. Redirecting activity to the marginal FDUSD could spark another heavy selloff.

After the previous policy shift, the billions in volume on BTC/BUSD evaporated overnight. While some of that migrated to BTC/TUSD, much simply left the exchange. With FDUSD barely registering in the top BTC pair rankings, similar results seem likely.

Critics argue that Binance’s constantly changing zero-fee pairs and policies create unnecessary instability in the wider market. And unstable market conditions right now, amidst the recent volatility, could lead to more heavy sell-offs, according to analysts.

But others believe the impacts will be minimal, as most high-frequency traders have already adapted to Binance’s zero-fee pair merry-go-round. However, only time will tell whether this latest shift triggers another cascade of selling or barely causes a ripple.