Binance to Phase Out Lending and Borrowing Services for BUSD by October 25
Summary:
Binance, the cryptocurrency exchange, has announced plans to end its lending and borrowing services for Binance USD (BUSD), its native stablecoin, by October 25. Users will still be permitted to utilize other stablecoins for borrowing and lending on Binance. The exchange revealed that it will completely phase out all BUSD-related operations by 2024, following fintech firm Paxos's decision to terminate its association with Binance, amid ongoing legal dispute with the U.S. Securities and Exchange Commission. Binance users are encouraged to convert BUSD holdings into fiat or other cryptocurrencies by next year.
Binance, a cryptocurrency exchange, has announced that it will discontinue lending and borrowing operations involving its native stablecoin, Binance USD (BUSD) by October 25. As per a proclamation made on October 3, all remaining BUSD loan and collateral positions will be settled before the month concludes. However, Binance users will still be entitled to conduct borrowing and lending transactions using other stablecoins such as Tether (USDT), Dai, TrueUSD (TUSD), and USD Coin (USDC). Binance currently allows users to loan their BUSD at an estimated 3% annual yield.
On the last day of August, Cointelegraph disclosed that Binance plans to discontinue all of its BUSD-related operations by 2024. In a related development, Paxos, the New York-based fintech company responsible for issuing BUSD, decided to dissolve ties with Binance amidst the exchange's ongoing lawsuit with the U.S. Securities and Exchange Commission. Paxos will cease redemptions of BUSD into equivalent U.S. cash and Treasury bonds in February 2024, while new BUSD minting is on pause for now.
Before the announcement of its termination, BUSD was one of the most substantial stablecoins, achieving an apex market capitalization of $23 billion in November 2022. Its current market capitalization stands lowered at $2.23 billion.
The phased termination of BUSD and associated services was rolled out in stages. In the preceding month, Binance put a halt to BUSD withdrawals through BNB Chain, Avalanche, Polygon, Tron, and Optimism, but kept them operational on the Ethereum network. Meanwhile, BUSD deposits are still accepted across all blockchain platforms, with the exchange encouraging users to switch their BUSD holdings into fiat or other cryptocurrencies by next year.
A formal notification on Binance's app has informed users that the platform will cease to support BUSD by 2024, aligning with Paxos's decision to stop BUSD purchases by February. Prior to its termination, BUSD boasted one of the most sizeable market capitalizations among stablecoins, touching a height of $23 billion in November 2022.
Published At
10/3/2023 3:45:36 PM
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