Binance to Halt Support for BUSD by 2024

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Key takeaways:

  • Binance ceases trading for select pairs, aims to discontinue BUSD use gradually.
  • Despite BUSD shift, Binance expands globally, introducing crypto-to-bank service in Latin America.

Binance, a prominent player in the cryptocurrency exchange realm, has unveiled its intention to gradually scale back its backing of the Binance USD (BUSD) stablecoin by February 2024. This strategic shift comes in response to Paxos, the entity responsible for issuing BUSD, suspending the creation of new BUSD tokens.

In light of Paxos‘s decision to halt BUSD token minting, Binance will progressively reduce its involvement in BUSD-related offerings. The company will be releasing notifications regarding any services that will be impacted by this adjustment. It’s important to note that BUSD will maintain its 1:1 peg to the US Dollar, ensuring its stability.

The forthcoming changes involve the removal of BUSD trading pairs for spot and margin trading on the Binance platform. However, specific dates for these changes have not been disclosed. Notably, not all the platforms and services reliant on Binance’s native stablecoin will be influenced. Deposits and withdrawals of BUSD tokens via Ethereum will persist, alongside deposits on various networks such as Polygon, BNB Chain, Avalanche, and Tron.

Anticipations of discontinuing support for BUSD emerged when Paxos was directed to cease the issuance of the stablecoin back in February. Binance’s CEO, Changpeng Zhao, previously indicated that BUSD would gradually phase out, although the precise timeline remained uncertain. The recent decision to halt BUSD loans with only a few weeks’ notice implies an acceleration of these previously tentative timelines.

Binance has recently made public its plan to discontinue trading for the following spot trading pairs on September 1, 2023: ANKR/BNB, CVC/BUSD, EPX/BUSD, HIVE/BUSD, IOTA/BNB, KLAY/BUSD, LRC/BNB, MBL/BUSD, MTL/ETH, and UMA/BUSD.

Despite gradually phasing out its support for the BUSD stablecoin, Binance remains committed to its global expansion endeavors. The exchange is actively pursuing its expansion initiatives and is now extending its reach to Latin America. It has introduced a service facilitating cryptocurrency-to-bank account payments in the region.

Binance’s decision to reduce its involvement with BUSD aligns with events that transpired when the United States Securities and Exchange Commission (SEC) raised concerns.

 On February 13, the SEC alleged that BUSD might be categorized as an unregistered security, as indicated in a wells notice directed at Paxos, the issuer of BUSD. Binance is set to gradually phase out the utilization of BUSD across a range of products and services in a stepwise manner.

Unless otherwise indicated, products such as Futures, Earn, Loans, Gift cards, and Pay, which currently rely on BUSD, will progressively transition away from its use. This process will commence in the early weeks of September and will extend until December.

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Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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