Binance to End Support for BUSD Stablecoin
Binance, the world’s largest cryptocurrency exchange, has announced plans to phase out support for the Binance USD (BUSD) stablecoin by the end of December. This decision comes after US authorities forced Paxos to stop issuing the token earlier this year.
Support for BUSD Ending
Binance has stated that it will end support for the BUSD stablecoin after December 15th. The exchange urged users to withdraw their BUSD holdings from the platform or convert them into other assets. It also mentioned that users can convert their BUSD to another stablecoin, First Digital USD (FDUSD), at a 1:1 rate with zero fees. All spot trading pairs involving BUSD will be delisted, and spot-taking orders and Spot Trading Bot services will be terminated. Futures delistings will occur according to a different schedule.
Paxos Ceased Issuing BUSD In February
Paxos, Binance’s issuing partner for BUSD, announced in February that it would stop minting the stablecoin following action by the New York Department of Financial Services (NYDFS). However, Binance clarified that Paxos would continue to offer support and redemption services for BUSD until at least February 2024. In response to these developments, Binance began discontinuing the BUSD stablecoin by replacing it in its SAFU fund and utilizing other stablecoins. In October, it announced the end of BUSD borrowing and staking.
The Crackdown On Crypto Organizations
US authorities have been cracking down on major crypto entities like Binance. Recently, Binance agreed to pay $4 billion in fines, with its CEO stepping down after pleading guilty to violating the Bank Secrecy Act. The BUSD stablecoin, launched in 2019, was once the third-largest stablecoin in the market. Meanwhile, Paxos plans to issue its own USD-backed stablecoin called PYUSD in partnership with PayPal.
Hot Take: Binance Ends Support for BUSD Stablecoin
Binance’s decision to end support for the BUSD stablecoin reflects the increasing regulatory pressure faced by crypto exchanges and organizations. With US authorities cracking down on crypto entities, Binance is taking steps to comply and adapt. The discontinuation of BUSD support aligns with Paxos’ decision to stop minting the token following regulatory action earlier this year. This move highlights the challenges faced by stablecoins in maintaining regulatory compliance and the need for crypto organizations to navigate a rapidly evolving regulatory landscape. It remains to be seen how this will impact the stability and value of BUSD and the broader ecosystem of stablecoins.
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