Binance, the World’s Leading Cryptocurrency Exchange by Global Trade Volume, Initiates Discontinuation of Support for Stablecoin BUSD with a Gradual Phase-Out Strategy
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Cryptocurrency giant Binance, known for its global trade volume dominance, recently made an announcement regarding the stablecoin BUSD. In a move that surprised many in the crypto community, Binance disclosed its decision to discontinue support for BUSD and encouraged users to swap their BUSD holdings for other stablecoins before February 2024.
The world’s largest cryptocurrency exchange by global trade volume, Binance, has announced it's discontinuing support for the stablecoin asset BUSD. The trading platform encourage users to swap their BUSD as Binance gradually phases out BUSD markets.#BTC #BUSD #ETF #BINANCE pic.twitter.com/XZECVbyown
— SpaceVerse Lounge (@sverselounge) September 1, 2023
Starting on September 7, Binance began taking gradual steps to phase out BUSD support. This process began with the suspension of BUSD loans on cross-margin, and by October 19, users on cross-margin and portfolio margin accounts will no longer be able to transfer additional BUSD as collateral. Furthermore, withdrawals of Binance-Peg BUSD tokens via various networks, including BNB Chain, Avalanche, Polygon, Tron, and Optimism, will cease on September 7.
Hence, the decision to discontinue BUSD support on Binance stems from the fact that the stablecoin’s issuer, Paxos, has stopped minting BUSD. This change in minting status was prompted by regulatory pressure from U.S. authorities. As a result, Binance is taking steps to adapt to this situation and streamline its offerings.
Binance Phases Out BUSD Support: Implications and Market Dynamics
Binance, the world’s leading cryptocurrency exchange, has announced the discontinuation of its support for the stablecoin BUSD. Currently, BUSD has a market valuation slightly exceeding $3 billion, with 327 million FDUSD tokens (formerly BUSD) in circulation. Notably, Binance has assured users that BUSD will always maintain a 1:1 backing with the U.S. dollar, ensuring its stability and reliability.
The total market value of #BUSD fell below $3 billion, which has shrunk by more than 70% in the past six months;
A whale sold the #ETH that was bought after the rally, losing $790,000 – Does the 'whale' now see downside ahead? pic.twitter.com/JnsPyDKl37— Matthew Dixon – CEO Evai (@mdtrade) September 1, 2023
In the broader cryptocurrency market, Binance wields significant influence. Beyond BUSD, it holds substantial stakes in other stablecoins. According to Nansen analytics, Binance controls more than 5% of the TrueUSD (TUSD) supply and manages over $17 billion worth of Tether (USDT). This underscores Binance’s pivotal role within the cryptocurrency ecosystem.
As Binance proceeds with its phased withdrawal of BUSD support, users are encouraged to swap their BUSD holdings for other stablecoins before February 2024, following the cessation of BUSD minting by Paxos, the issuer. This move reflects the evolving dynamics of the cryptocurrency industry and Binance’s commitment to maintaining the integrity and adaptability of its offerings.
Binance’s BUSD Discontinuation: Navigating Regulatory Changes
Binance’s decision to discontinue BUSD support highlights the cryptocurrency industry’s evolving regulatory landscape. It underscores Binance’s adaptability and commitment to ensuring the stability of its offerings. This move is expected to have a limited impact on Binance given its diversified stablecoin holdings but signals the need for continued vigilance and compliance in the crypto sector amid regulatory pressures.
