Binance, the world’s largest cryptocurrency exchange, has announced plans to end support and phase out the Binance USD (BUSD) stablecoin by the end of December.
The move to end support for BUSD comes after US authorities and regulators forced Paxos to stop issuing the token earlier this year.
Support For BUSD Ending
In a major announcement, Binance has said it will end support for the Binance USD (BUSD) stablecoin after the 15th of December. The move comes after Paxos stopped issuing the token earlier this year. In an announcement made on the 29th of November, Binance stated,
“This is to notify you that as Paxos has halted minting of new BUSD, Binance will cease support for BUSD products on 2023-12-15. Please be assured that BUSD will always be backed 1:1 by USD. Paxos has stated that BUSD will remain supported by Paxos and redeemable through at least February 2024.”
The exchange urged users to withdraw their BUSD holdings from the platform or convert their BUSD into other assets before the 15th of December. It also noted that users can convert their BUSD to another stablecoin, First Digital USD (FDUSD), at a 1:1 rate with zero fees. The exchange also indicated that all spot trading pairs involving the BUSD stablecoin will be delisted between the 11th of December and the 15th of December. It also said that spot-taking orders and Spot Trading Bot services will be terminated on the relevant dates, with futures delistings set to occur according to a different schedule.
“Users are encouraged to withdraw or convert their BUSD assets into other available assets on Binance before 2023-12-15. Users may trade their BUSD balances for FDUSD at zero trading fees or convert their BUSD balances to FDUSD on Binance Convert at a 1:1 conversion rate with zero fees.”
Binance also added that it will end BUSD withdrawals on the 31st of December. After the 31st, any BUSD held by users would automatically be converted to FDUSD. However, users in certain countries will not have their BUSD converted at the time.
“From 2023-12-31 03:00 (UTC), BUSD withdrawals will be disabled, and any remaining BUSD balances in users’ Binance accounts other than users in Japan, France, Italy, Poland, and Kazakhstan will be automatically converted to FDUSD at a 1:1 conversion rate.”
Paxos Ceased Issuing BUSD In February
Paxos, Binance’s issuing partner for the BUSD stablecoin, announced in February that it would stop minting BUSD following action by the New York Department of Financial Services (NYDFS). However, Binance, in its announcement, stated that Paxos would continue to offer support and redemption services for BUSD until at least February 2024. Paxos had stated at the time,
“Paxos, the leading regulated blockchain and tokenization infrastructure platform, announced it will end its relationship with Binance for the branded stablecoin BUSD. Effective the 21st of February, Paxos will cease issuance of new BUSD tokens as directed by and working in close coordination with the New York Department of Financial Services (NYDFS).”
Binance began the gradual discontinuation of the BUSD stablecoin in response to the action and developments involving Paxos. In March, the cryptocurrency exchange announced it would replace BUSD in its SAFU fund and utilize other stablecoins while supporting BUSD more broadly. The exchange stated that this action was necessary following Paxos’ decision to stop minting the stablecoin.
“This swap is to ensure that assets in SAFU continue to protect users in the long term as the BUSD market capitalization continues to decrease over time.”
In August, the exchange announced it would be ending support for BUSD by February 2024. However, it did not give any specific dates by which support for the stablecoin would cease. In October, it announced the end of BUSD borrowing and staking.
The Crackdown On Crypto Organizations
US authorities have relentlessly cracked down on major crypto entities such as Binance. Recently, Binance agreed to pay a staggering $4 billion in fines, with its CEO Changpeng Zhao stepping down from his position after pleading guilty to wilfully violating the Bank Secrecy Act. The BUSD stablecoin was launched in 2019 and, at one point, was the third-largest stablecoin in the market. Meanwhile, Paxos has revealed plans to issue a USD-backed stablecoin of its own called PYUSD, in partnership with PayPal.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice
