Binance to Halt Support for its Stablecoin BUSD Starting Dec 15 Amid Regulatory Pressure
Summary:
Binance, a leading cryptocurrency exchange, will cease support for its native stablecoin, Binance USD (BUSD), starting Dec. 15, following Paxos' halt in coin creation. Existing BUSD balances on the exchange platform should be withdrawn or swapped into other assets before Dec. 15, after which they will be automatically converted to First Digital USD (FDUSD). This is part of Binance's phased discontinuation of BUSD support, sparked by regulatory concerns. The stablecoin's market cap has shrunk by 92% within a year, standing at approximately $1.7 billion currently.
Binance, a foremost cryptocurrency exchange, made it known that support for all Binance USD (BUSD) offerings will stop beginning Dec. 15, in the wake of Paxos ceasing the production of new coins. A statement released by Binance on Nov.29 encouraged users to either withdraw or swap their existing Binance USD on the platform into other assets ahead of the Dec.15 deadline. As of Dec. 31, Binance will stop withdrawals for Binance USD, and afterward, the remaining balances will be turned into First Digital USD (FDUSD) for certain account holders.
The step is the most recent one taken by Binance aimed at suspending services for its native stablecoin. Binance made it public earlier that it was set to gradually discontinue Binance USD support, potentially by February 2024, with an initial stopping of lending and borrowing services for the stablecoin in October. The US Securities and Exchange Commission had suggested in February that Binance USD might be regarded as an unregistered security as conveyed in a Wells notice to Paxos, the entity behind the stablecoin. The New York finance authorities further demanded Paxos to put vending of Binance USD on hold.
As per a report made on Nov. 21, Binance and ex-CEO Changpeng Zhao reached a settlement agreement with US authorities to pay a sum of $4.3 billion. Zhao stepped down as part of the settlement, with Richard Teng, the exchange’s regional markets’ head, replacing him. Before August, Binance USD was amongst the top stablecoins by market capitalization, hitting over $23.3 billion in November 2022. At the moment, the stablecoin’s market cap stands at an approximate $1.7 billion, marking a downturn of over 92% in a year.
Published At
11/29/2023 9:04:54 PM
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