Binance Enables USDT Transactions on TON

Jimmy Aki
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On June 21, Binance and Tether announced the successful integration of Tether (USDT) on the Toncoin Network. This innovative approach improves the accessibility and usability of USDT within the Binance TON ecosystem.

Binance Ton Network Aims to Reduce USDT Transactions Fees

According to a recent announcement, the integration of USDT on the TON through Binance brings several advantages, including the pathway for Binance users to deposit and withdraw USDT on the Toncoin Network.

It is expected that the integration would bring improvement in transaction speeds and a reduction in fees, making USDT transactions more efficient and cost-effective for both daily transactions and large transactions due to the Toncoin Network’s high efficiency and relatively low commission compared to other networks.

Additionally, the integration improves security for users’ funds. The TON blockchain is designed with a high-end security system, which helps protect users’ deposits and withdrawals from fraud or hacker attacks. By facilitating USDT transactions on this network, Binance can provide an added layer of security for its users.

The Binance TON integration for USDT transactions stems from Telegram, a messaging app linked to TON, and the stablecoin’s recent partnership.

Recall that in April, Tether CEO Paolo Ardoino and Telegram CEO Pavel Durov, at the TOKEN2049 Conference in Dubai, revealed a partnership that would allow all wallets users on Telegram to send USDT instantly and without fees.

This latest adoption of USDT on TON positions the blockchain as the sixth-largest in terms of USDT volume, trailing major blockchains like TRON, Ethereum, and Solana. Looking ahead, Tether and TON plan to further boost adoption by launching more than 100 integrations with partners worldwide.

Despite these positive developments, Toncoin (TON), the native token of the TON blockchain, is not yet listed on Binance’s spot market. While Binance offers Toncoin on the derivatives market and allows USDT transfers on the TON network, the absence of TON on the spot market raises questions about Binance’s strategy regarding this asset.

This development is coming on the heels of the $2.25 million fine imposed on Binance by India’s Financial Intelligence Unit (FIU) as the exchange plans to re-enter the Indian market after being banned for its non-compliance with the anti-money laundering (AML) in the country.

Will Binance TON Network Integration Face Compliance Issues?

Binance’s integration of USDT on the TON blockchain is speculated to be a strategic preparation for the upcoming regulatory changes in the European Economic Area (EEA), which entails the commencement of the Markets in Crypto-Assets Regulation (MiCA).

The MiCa regulations, set to become effective on June 30, 2024, mandates that fiat-backed stablecoins must be supported by “a 1:1 ratio of liquid reserves” and that issuers must maintain these reserves with a third party, segregated from other assets.

The EU regulation also places a ban on algorithmic stablecoins.

Consequently, stablecoin issuers in the EU must obtain licenses as credit institutions or Electronic Money Institutions under the MiCA framework. While some dollar-backed stablecoins like USDT may face challenges, those backed by the euro could prosper under the new regulations.

Already, Uphold exchange notified its European users that it would restrict support for six popular stablecoins starting July 1, 2024, to comply with MiCA. The affected stablecoins include Tether (USDT), Dai (DAI), Frax Protocol (FRAX), Gemini Dollar (GUSD), Pax Dollar (USDP), and TrueUSD (TUSD).

The exchange notification also urged customers to convert these stablecoins to other cryptocurrencies by June 28, 2024, or the platform will automatically convert them into USD Coins.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.