Binance, one of the world’s leading cryptocurrency exchanges, has made the decision to gradually withdraw support for its native stablecoin, BUSD (Binance USD). This move will entail the delisting of BUSD trading pairs for both spot and margin trading, although specific dates for these actions have not been officially disclosed.
In an official press release, Binance has encouraged its users to convert their BUSD holdings into other assets by February 2024. As part of this process, the platform will cease to offer its branded token as a loanable asset effective September 6. Withdrawals of Binance-pegged BUSD tokens via BNB Chain, Avalanche, Polygon, and Tron will be discontinued starting on September 7.
This decision comes on the heels of an order from the New York Department of Financial Services (NYDFS) earlier this year, directing Paxos, the issuer of BUSD, to halt its issuance. Binance’s CEO, Changpeng Zhao, had previously indicated that the gradual winding down of BUSD was on the horizon, but the exact timeline had remained uncertain.
Certain services that rely on BUSD will continue to operate without disruption. Deposits and withdrawals of BUSD tokens through Ethereum will remain unaffected, as well as deposits on Polygon, BNB Chain, Avalanche, and Tron.
In the interim, Binance has laid out plans to phase out the use of BUSD across various products in stages. Services like Futures, Earn, Loans, Gift cards, and Pay products will begin to discontinue their reliance on BUSD in early September, with the process extending until December.
This announcement underscores the ongoing regulatory challenges faced by Binance on a global scale. The exchange is currently under investigation by law enforcement agencies in multiple jurisdictions, with allegations ranging from breaking securities laws in the United States to money laundering in France and running a pyramid scheme in Brazil. Despite these challenges, Binance continues to introduce new products, such as the recently launched crypto-to-bank payment solution named “Send Cash” in several Latin American countries.
Binance initially introduced its native stablecoin in 2019. BUSD was developed in collaboration with US-based Paxos, which serves as both its issuer and custodian of fiat reserves. Since its inception, the $16 billion stablecoin has been available for direct purchase and redemption on the Paxos platform, as well as for trading on Binance.com and various other exchanges.
