Binance to phase out BUSD support in two weeks
Binance has announced its plans to gradually phase out support for its native stablecoin, BUSD (Binance USD) by December 15, 2023. This move comes after Paxos, the issuer of BUSD, decided to stop minting new tokens.
Paxos, however, assures users that BUSD will remain fully backed 1:1 by USD and redeemable through at least February 2024.
Binance users are encouraged to withdraw or convert their BUSD assets into other available assets on the platform before the cutoff date. The exchange is facilitating this transition by offering zero-fee trading of BUSD for FDUSD, and a 1:1 conversion rate on Binance Convert.
After December 31, BUSD withdrawals will be disabled on the platform, and any remaining BUSD balances, except for users in Japan, France, Italy, Poland, and Kazakhstan, will be automatically converted to FDUSD at a 1:1 rate. However, users from the excluded countries are advised to manually convert their BUSD to other assets.
Binance has also outlined changes to its products involving BUSD, including the removal and cessation of trading in various spot trading pairs. These changes will be implemented in phases, starting from December 11, 2023. Additionally, the Binance Spot Trading Bots service for the affected trading pairs will be terminated on the respective dates.
As part of this process, the futures and margin trading of BUSD will also be phased out according to the schedule announced by Binance. Furthermore, the platform will temporarily suspend BUSD deposits via various networks, including BNB Smart Chain and Ethereum, among others.
In addition to these changes, Binance’s Earn, Card, Pay, and Gift Card services will also see adjustments. For instance, Dual Investment will convert all open BUSD positions to FDUSD, and BUSD will be delisted as a spend currency for Binance Card.
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.
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.