Forbes: Binance Holds ~87% of USD1 Circulating Supply, Raising Centralization and Liquidity Risks
Forbes and Arkham Intel data show Binance-controlled wallets hold roughly 86–87% of the USD1 stablecoin circulating supply (about $4.3–4.7 billion of a $5.4–5.36 billion total). Binance’s concentration in USD1 is the highest among the top-10 stablecoins by market cap. Binance says supporting USD1 is standard practice for exchanges and denied any improper link between its CEO’s pardon and USD1 promotion. World Liberty Financial (USD1’s issuer) and Binance both described promotional activity — including waived conversion fees in Dec 2025 and a $40 million rewards pool in Jan — as routine, while denying undue influence; the White House also denied conflicts of interest involving former President Trump, whose family is reported to hold governance stakes in World Liberty Financial. The revelations highlight material concentration and counterparty risk: USD1 liquidity, distribution and price are heavily dependent on Binance’s custody and incentives. For traders, key implications are elevated concentration risk, potential regulatory and political scrutiny, and liquidity sensitivity if Binance alters holdings, incentives or delisting decisions. Monitor on-chain flows, Binance wallet activity, and regulatory developments closely — large shifts or policy actions could trigger rapid USD1 price and spread volatility and affect trading pairs that use USD1 as a base.
Bearish
High concentration of USD1 balance on Binance creates clear counterparty and liquidity risks that are likely to exert downward pressure or increased volatility on USD1 specifically. In the short term, revelations that ~87% of circulating USD1 sits in exchange-controlled wallets can prompt immediate risk-off behavior among traders: wider spreads, reduced willingness to hold USD1 off-exchange, and potential outflows if counterparties or regulators react. Market makers may widen quotes or reduce inventory, increasing price slippage for large trades. Over the medium to long term, regulatory scrutiny or changes in Binance’s incentives (fee waivers, rewards pools) could materially affect demand and convertibility; any decision by Binance to reduce holdings, halt conversions, or face enforcement would likely depress USD1 liquidity and could cause de-pegging pressure. Conversely, if Binance and the issuer maintain support and transparency, some risk could be mitigated, but concentration remains a structural vulnerability. Overall, the net effect on USD1 price dynamics is negative-to-volatile — traders should treat USD1 positions as higher risk, hedge exposure, avoid large unilateral positions, and monitor on-chain flows and regulatory signals closely.