Binance Phasing Out BUSD Lending Services by October 25
Binance has announced that it will be phasing out its Binance USD (BUSD) lending services by October 25, as part of its plan to cease all BUSD-related offerings by 2024. This decision aligns with the earlier move by Paxos, a New York fintech firm, to terminate its association with Binance due to legal issues with the U.S. Securities and Exchange Commission (SEC). Paxos had already planned to stop BUSD redemptions to U.S. cash and Treasuries by February 2024 and temporarily paused minting new BUSD.
Market Capitalization of BUSD Drops Significantly
Before the announcement, BUSD reached a peak market capitalization of $23 billion in November 2022. However, this value has since plummeted to $2.23 billion.
Binance Urges Users to Transition to Alternative Stablecoin Options
In a strategic shift, Binance suspended withdrawals of BUSD through multiple blockchain networks, except for the Ethereum network. The exchange is now encouraging users to transfer their BUSD assets to fiat or other stablecoin options within the next year. Binance specifically recommends First Digital USD (FDUSD) as an alternative stablecoin, which was recently launched by First Digital Group.
Regulatory Pressure and Allegations Against BUSD
The decision by Binance comes after the U.S. SEC alleged that BUSD functions as an unregistered security. As a result, the New York Department of Financial Services instructed Paxos to stop issuing BUSD. It is crucial for users to stay informed about regulatory developments and make informed decisions regarding their BUSD assets.
Hot Take: Binance Responds to Regulatory Pressure by Phasing Out BUSD Lending Services
Binance has announced that it will be phasing out its Binance USD (BUSD) lending services by October 25, as part of its plan to cease all BUSD-related offerings by 2024. This decision aligns with the earlier move by Paxos, a New York fintech firm, to terminate its association with Binance due to legal issues with the U.S. Securities and Exchange Commission (SEC). The market capitalization of BUSD has significantly dropped from its peak value of $23 billion in November 2022. In response, Binance is urging users to transition their BUSD assets to alternative stablecoin options, such as First Digital USD (FDUSD). These actions come as regulatory pressure mounts against BUSD, with allegations that it functions as an unregistered security. Users must stay updated on regulatory developments and make informed decisions regarding their BUSD assets.
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