Breaking: Binance to Halt BUSD Borrowing and Staking Services by October 25th
Binance is phasing out its Binance USD (BUSD) lending services by October 25. This move is the latest in a series of steps toward the cessation of all BUSD-related offerings by 2024.
Paxos Ends Ties Amid Regulatory Pressure
Significantly, this decision by the exchange aligns with the earlier stance taken by the New York fintech firm Paxos. They intended to terminate their association with the exchange due to legal issues between it and the U.S. Securities and Exchange Commission (SEC).
Moreover, Paxos had highlighted its plan to stop BUSD redemptions to U.S. cash and Treasuries by February 2024. Additionally, it placed a temporary pause on the minting of new BUSD.
Before this announcement, BUSD boasted an impressive peak market capitalization of $23 billion in November 2022. However, this value has since plunged to $2.23 billion.
Binance Directs Users Towards Alternative Stablecoin Options
Last month, in a strategic shift, Binance suspended withdrawals of BUSD through multiple blockchain networks. However, they maintained the service on the Ethereum network. The exchange has urged users to transition their BUSD assets to fiat or other crypto options within the upcoming year.
Binance has prompted its clientele to transfer their BUSD assets to other stablecoins in another significant move. The emphasis has been on the newly launched First Digital USD (FDUSD) by First Digital Group. This Hong Kong-based trust company debuted its stablecoin on Binance in late July.
Binance’s actions come after the U.S. SEC’s allegations that BUSD functions as an unregistered security. Consequently, the New York Department of Financial Services directed Paxos to cease the issuance of BUSD.
As Binance maneuvers through regulatory hurdles, users must stay updated and make informed decisions regarding their BUSD assets.
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