Binance to cease support for its BUSD stablecoin
Binance has announced its plans to gradually phase out support for its native stablecoin, BUSD (Binance USD). The exchange will be delisting BUSD trading pairs for both spot and margin trading, although specific dates for these actions have not been provided.
In an official press release, Binance indicated that users are encouraged to convert their BUSD holdings into other assets by February 2024. As part of this process, the platform will discontinue providing its branded token as a loanable asset on September 6. Withdrawals of Binance-peg BUSD tokens via BNB Chain, Avalanche, Polygon, and Tron will cease on September 7.
The decision to end support for BUSD comes after Paxos, the issuer of the stablecoin, was ordered to stop minting it by the New York Department of Financial Services (NYDFS) in February. Binance’s CEO Changpeng Zhao previously stated that BUSD would gradually wind down over time, but the exact timeline remained unclear.
Certain services that utilize BUSD, however, will continue to function as before. Deposits and withdrawals of BUSD tokens through Ethereum will persist, as well as deposits on Polygon, BNB Chain, Avalanche, and Tron.
In the meantime, Binance plans to phase out the use of BUSD in various stages across its product spectrum. Services like Futures, Earn, Loans, Gift cards, and Pay products will begin discontinuing their use of BUSD starting in the early weeks of September and continuing until December.
This announcement reflects the ongoing regulatory challenges Binance is facing globally. The exchange is under investigation by law enforcement agencies in multiple jurisdictions, including allegations of breaking securities laws in the United States, money laundering in France, and running a pyramid scheme in Brazil. Despite these challenges, Binance is still introducing new products, such as the recently launched crypto-to-bank payment solution called “Send Cash” in several Latin American countries.
Binance launched its native stablecoin back in 2019. BUSD was built in association with US-based Paxos, which serves as its issuer as well as custodian of fiat reserves. Since then, the $16 billion stablecoin has been up for direct purchase and redemption on the Paxos platform, as well as for trading on Binance.com and other exchanges.
The SEC also plans to sue Paxos for violating investor protection rules. The issuer was already told of the planned enforcement action as the regulator claims that Binance USD is an unregistered security.
