Binance has set forth a plan to gradually discontinue BUSD stablecoin support across its platforms. The exchange has asked its users who have been relying on BUSD for trading to convert their holdings into alternative assets by February of the upcoming year. However, Binance stated that BUSD will always maintain a 1:1 peg with the stablecoin.
As a more immediate change, Binance has scheduled the delisting of BUSD as a loanable asset, set to take effect on September 6. Moreover, withdrawals of Binance-peg BUSD tokens via BNB Chain, Avalanche, Polygon, and Tron will cease on September 7.
As Paxos has halted minting of new BUSD, #Binance will now gradually remove support for the stablecoin on our platform.BUSD will always remain backed 1:1 by USD, and we continue to support a wide range of other stablecoins.Find more details below.
— Binance (@binance) August 31, 2023
Binance Embraces New Stablecoin
Despite facing some regulatory concerns earlier this year due to an order from the New York Department of Financial Services (NYDFS), BUSD has maintained a significant presence in the market. According to data from CoinmarketCap, the stablecoin has a market valuation of USD $3 billion with a 24-hour trading volume approaching USD $900 million.
The US Securities and Exchange Commission (SEC) has raised concerns about the status of BUSD, alleging that it was unregistered security. The SEC's stance was communicated through a Wells notice issued to Paxos on February 13. Concurrently, NYDFS services ordered Paxos to halt the issuance of BUSD.
Notably, to facilitate this shift, Binance has provided options for users to trade their BUSD balances for FDUSD at zero trading fees or convert their BUSD holdings to FDUSD at a 1:1 ratio. According to the exchange's statement, the phased withdrawal of BUSD support encompasses various facets of its platform.
FDUSD is a stablecoin launched by the Hong Kong-based trust company, First Digital Group in June. The USD-based stablecoin can execute contracts, escrow services, and insurance without intermediaries and operate on the BNB Smart Chain. The timing of FDUSD's launch aligned with the commencement of retail cryptocurrency trading in Hong Kong under newly established guidelines.
First Digital, a Hong Kong licensed trust company, launches a new USD pegged stablecoin (FDUSD), on #BNB Smart Chain.
— CZ ???? Binance (@cz_binance) June 1, 2023
Multiple Spot Trading Pairs Termination
In the realm of spot and margin trading, Binance plans to gradually delist BUSD trading pairs. While BUSD's spot and margin trading ends, the exchange noted that users can continue trading supported assets through other stablecoin pairs and trading pairs available on its platform.
"Simple Earn Flexible Products will stop offering BUSD subscriptions on October 13, 2023, 04:00 (UTC)," Binance added. "Auto-Invest will discontinue BUSD plan subscriptions on October 15, 2023, 02:00 (UTC). Users should modify their BUSD Auto-Invest plan settings to alternatives like FDUSD prior to this date."
Meanwhile, Yesterday (Wednesday), Binance revealed plans to streamline its trading offerings by removing certain trading pairs. According to the company's announcement, effective September 1, 2023, several trading pairs, including ANKR/BNB, CVC/BUSD, EXP/BUSD and KLAY/BUSD will no longer be available for trading on the platform.
This article was written by Jared Kirui at www.financemagnates.com.
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