Friday, June 21, 2024

Binance Initiates Phased Withdrawal of Support for BUSD Stablecoin

Binance, recognized as the world’s most extensive cryptocurrency exchange based on global trade volume, has recently unveiled its strategic decision to discontinue the provision of support for the BUSD stablecoin. In a comprehensive statement, the trading platform outlined its intention to gradually phase out BUSD markets while advising its users to execute the conversion of their BUSD holdings into alternative stablecoins.

As of August 31, Binance officially communicated the forthcoming cessation of BUSD support, accompanied by a clear directive for users to perform the conversion of their BUSD holdings into other stablecoins by the time February 2024 arrives. The official blog post further emphasizes that the issuer of BUSD, Paxos, has elected to cease the minting of this stablecoin. In response, Binance is facilitating seamless and no-fee swaps for customers looking to transform their BUSD balances into FDUSD.

Subsequent to this announcement, a series of pivotal dates have been provided to signify the progressive suspension of BUSD-related services. On September 7, the offering of BUSD loans on cross margins will be suspended, followed by the discontinuation of cross-margin and portfolio margin users’ capacity to employ additional BUSD as new collateral in the platform’s cross-margin wallet on October 19. Notably, the withdrawal of Binance-Peg BUSD tokens via multiple networks including BNB Chain, Avalanche, Polygon, Tron, and Optimism is scheduled to halt as of September 7.

While certain support services will continue “until further announcements,” it is essential to acknowledge that several specific BUSD phase-out dates are detailed in connection with Binance’s loan and earn programs. The current supply of BUSD has demonstrated a gradual decrease following regulatory developments that led Paxos to suspend the minting of this stablecoin. Presently, the valuation of the BUSD stablecoin hovers slightly above the $3 billion range, with approximately 327 million FDUSD units in circulation. Noteworthy is Binance’s affirmation that despite the discontinuation of BUSD, the exchange guarantees that BUSD will always maintain a 1:1 backing with the USD.

In tandem with these developments, analytical insights from Nansen shed light on Binance’s commanding position in the TUSD supply, reflecting that the exchange holds a significant share, accounting for over 5% of its reserves. Additionally, Binance’s notable possession of more than $17 billion worth of tether (USDT) reaffirms its stronghold in the stablecoin landscape.

As Binance embarks on the phased withdrawal of support for BUSD, industry participants and stakeholders are invited to share their perspectives and viewpoints on this substantial move. The comments section below offers an opportunity for a discourse on this pivotal development and its implications for the cryptocurrency ecosystem.

Frequently Asked Questions (FAQs) about cryptocurrency exchange

What is Binance’s recent announcement regarding BUSD support?

Binance, the largest global cryptocurrency exchange, has revealed its decision to discontinue support for the BUSD stablecoin gradually.

When will Binance stop supporting BUSD?

Binance’s BUSD support will be phased out over time, and users are encouraged to convert their BUSD holdings to other stablecoins before February 2024.

Why is Binance discontinuing BUSD support?

The issuer of BUSD, Paxos, has ceased minting the stablecoin due to regulatory considerations, prompting Binance to initiate the phase-out process.

What are the options for users holding BUSD on Binance?

Binance is offering users the opportunity to convert their BUSD holdings into FDUSD through no-fee swaps, ensuring a smooth transition for their assets.

How will Binance suspend BUSD-related services?

On September 7, BUSD loans on cross margins will be suspended. Additionally, as of October 19, cross-margin and portfolio margin users cannot add BUSD as new collateral.

What networks will cease withdrawals for Binance-Peg BUSD tokens?

Withdrawals of Binance-Peg BUSD tokens via BNB Chain, Avalanche, Polygon, Tron, and Optimism networks will cease on September 7.

Will BUSD continue to have a 1:1 backing with USD despite the discontinuation?

Yes, Binance ensures that BUSD will maintain its 1:1 backing with USD, even as support for the stablecoin is phased out.

How has the supply of BUSD been affected?

BUSD’s supply has gradually decreased due to Paxos suspending minting after regulatory pressures from U.S. authorities.

What is the valuation of BUSD and FDUSD?

BUSD’s market valuation is slightly above $3 billion, while there are around 327 million FDUSD units in circulation.

What other stablecoins does Binance hold significant amounts of?

Nansen analytics show that Binance holds a significant portion of the TUSD supply and controls over $17 billion worth of tether (USDT).

How can stakeholders share their opinions on this development?

Stakeholders and industry participants can share their thoughts and opinions on Binance’s decision to discontinue BUSD support in the comments section provided below the official announcement.

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5 comments

CryptoEnthusiast92 September 1, 2023 - 11:02 am

binance makin’ big moves dis time, sayin’ bye to busd! gotta watch out fo’ changin’ tides in crypto seas, ya kno?

Reply
StablecoinKing September 1, 2023 - 2:30 pm

Paxos stop mintin’ BUSD, Binance pivotin’ strategy. Times are changin’, crypto landscape shiftin’.

Reply
CryptoTraderX September 1, 2023 - 7:21 pm

Holdin’ my BUSD bags, wonderin’ ’bout the future. Binance’s switch to FDUSD, hmm, interestin’ choice.

Reply
FinanceWizard September 2, 2023 - 12:36 am

Binance droppin’ BUSD like a hot potato! Big financial shifts, curious to see where these moves take us.

Reply
EconExplorer September 2, 2023 - 1:54 am

Regulatory ripples impactin’ BUSD journey. Binance adaptin’ its strategy in response to the winds of change.

Reply

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