BUSD Support Ending on Binance, Users Told to Swap Tokens
Binance has announced that it will be phasing out support for BUSD, and users are advised to convert their BUSD tokens to other stablecoins before February 2024. The stablecoin issuer, Paxos, has stopped minting BUSD, and Binance is offering fee-free swaps for customers who convert their BUSD balances to FDUSD.
- BUSD loans on cross margins will be suspended on September 7.
- On October 19, cross-margin and portfolio margin users will no longer be able to transfer additional BUSD as collateral.
- Withdrawals of Binance-Peg BUSD tokens via various networks will cease on September 7.
- Support for BUSD in Binance’s loan and earn programs will be phased out gradually.
BUSD’s market valuation is just above $3 billion, and there is currently 327 million FDUSD in circulation. Binance assures users that BUSD will always be backed 1:1 by USD, despite its discontinuation. Additionally, Binance holds a significant amount of TUSD and tether (USDT) reserves.
Hot Take
Binance’s decision to end support for BUSD seems to be driven by Paxos’ halt in minting the stablecoin. This move could potentially impact users who hold BUSD, as they will need to convert their tokens to other stablecoins. However, Binance’s offer of fee-free swaps and assurance of backing BUSD 1:1 by USD may mitigate any concerns. It will be interesting to see how this decision affects the stablecoin market and if other exchanges follow suit.
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