Crypto Exchange Binance to Cease Borrowing and Lending for BUSD
Binance, the popular cryptocurrency exchange, has announced that it will no longer offer borrowing and lending services for its native stablecoin, Binance USD (BUSD), starting from October 25. This decision was outlined in an official announcement made on October 3. As part of this change, all outstanding BUSD loan and collateral positions will be closed by the end of the month.
While BUSD lending will be discontinued, users will still have the option to borrow and lend other stablecoins such as Tether (USDT), Dai, TrueUSD (TUSD), and USD Coin (USDC) on Binance. Currently, users can lend their BUSD on the platform with an estimated annual percentage yield of 3%.
Phase-out Process for BUSD Services
This termination of BUSD-related services is being implemented in phases. In the previous month, Binance suspended BUSD withdrawals via several networks including BNB Chain, Avalanche, Polygon, Tron, and Optimism. However, BUSD deposits remain open on all blockchains. Users are encouraged to convert their BUSD balances into fiat or other cryptocurrencies before next year.
Impact on BUSD Market Capitalization
Prior to this announcement, BUSD was one of the largest stablecoins in terms of market capitalization. It reached a peak market cap of $23 billion in November 2022 but has since decreased to $2.23 billion at the time of writing.
Hot Take: Conclusion
Binance’s decision to discontinue borrowing and lending services for its native stablecoin BUSD reflects a strategic shift in their offerings. While this move may disappoint some users who have been utilizing BUSD for lending, Binance is still providing options to borrow and lend other stablecoins. The phased termination of BUSD services indicates a focus on streamlining operations and aligning with market demands. It remains to be seen how this decision will impact the overall stability and adoption of BUSD in the cryptocurrency ecosystem.
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