On December 15, Binance announced that it would no longer support the Binance USD (BUSD) stablecoin. This action follows regulatory challenges faced by BUSD’s issuer, Paxos, earlier this year, which resulted in an order to halt the stablecoin’s minting.
Back in August, Binance outlined its phased approach to gradually withdrawing support for the BUSD by February 2024.
During this time, users were encouraged to switch to another stablecoin, FDUSD. Notably, Binance is making the conversion free of charge.
Despite Binance’s decision, Paxos has assured users that BUSD will be supported and redeemable until at least February 2024, as stated in Binance’s blog post.
In February, the New York Department of Financial Services issued an order to Paxos instructing them to stop issuing BUSD (Binance USD).
Throughout the year, regulatory bodies in the United States have increased their efforts to regulate the cryptocurrency industry, leading to increased scrutiny of platforms such as Binance.
Binance recently agreed to pay over $4 billion in fines, and its CEO, Changpeng Zhao, resigned after admitting to willfully violating the Bank Secrecy Act.
Binance and Paxos launched BUSD, a stablecoin pegged to the US dollar, in 2019. At its peak, BUSD was the third-largest stablecoin in the market, with a total supply of more than $16 billion.
Paxos has also revealed plans to launch PYUSD, a USD-backed stablecoin for traditional fintech giant PayPal.
Sophia Hernandez is an experienced crypto writer who has been writing about crypto and blockchain technology for 3 years. She has a deep understanding of the complexities of the crypto market and is skilled at breaking down these concepts into easy-to-understand language for readers.
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