The exchange revealed that it will gradually phase out its support for BUSD due to Paxos discontinuing the issuance of new BUSD tokens.
Binance, one of the world's leading cryptocurrency exchanges, has announced a series of changes regarding its support for Binance USD (BUSD), a stablecoin pegged to the U.S. Dollar.
The exchange revealed that it will gradually phase out its support for BUSD due to Paxos discontinuing the issuance of new BUSD tokens. Binance emphasized that BUSD will always remain backed 1:1 by USD, providing users with confidence in its stability.
To facilitate the transition away from BUSD, Binance encouraged its users to convert their BUSD assets into other available assets on the platform before February 2024 in its announcement to Binance users.
Binance's recommendation is for users to either trade or convert their BUSD balances into FDUSD. This stablecoin, launched by Hong Kong-based trust company First Digital Group in June, was listed on Binance in July. Notably, conversions and trades between BUSD and FDUSD will be free of charge.
Source: https://coinmarketcap.com/currencies/first-digital-usd/
Since launching less than three months ago, FDUSD has grown to a market capitalization of $347.6M, making it the 11th most valuable stablecoin.
As part of this transition, Binance has already delisted eight BUSD trading pairs on August 30. The exchange had previously promoted the use of FDUSD by offering zero-fee trading pairs for FDUSD against major cryptocurrencies like Bitcoin (BTC) and Ether (ETH).
This shift away from BUSD support is believed to be a response to regulatory pressures. On February 13, the U.S. Securities and Exchange Commission (SEC) issued a Wells notice claiming that BUSD might be an unregistered security.
Following this notice, Paxos ceased the issuance of BUSD. Recently in August, Paxos issued PayPal’s newly launched stablecoin, PYUSD, which struggled to gain adoption.
