Binance Shifts Gears: Phases Out BUSD Support, Introduces New Alternative Stablecoin

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Binance has set forth a plan to gradually discontinue
BUSD stablecoin support across its platforms. The exchange has asked users who
have been relying on BUSD for trading to convert their holdings into
alternative assets by February of the upcoming year. However, Binance stated
that BUSD will always maintain a 1:1 peg with the stablecoin.</p><p>As a more immediate
change, Binance has scheduled the delisting of BUSD as a loanable asset, set to
take effect on September 6. Moreover, withdrawals of Binance-peg BUSD tokens
via BNB Chain, Avalanche, Polygon, and Tron will cease on September 7.</p><blockquote><p lang="en" dir="ltr">As Paxos has halted minting of new BUSD, <a href="https://twitter.com/hashtag/Binance?src=hash&amp;ref_src=twsrc%5Etfw">#Binance</a> will now gradually remove support for the stablecoin on our platform.BUSD will always remain backed 1:1 by USD, and we continue to support a wide range of other stablecoins.Find more details below.</p>— Binance (@binance) <a href="https://twitter.com/binance/status/1697159019234791909?ref_src=twsrc%5Etfw">August 31, 2023</a></blockquote><p>Binance Embraces New
Stablecoin</p><p>Despite facing some regulatory concerns earlier this year
due to an order from the New York Department of Financial Services (NYDFS),
BUSD has maintained a significant presence in the market. According to data
from CoinmarketCap, the stablecoin has a market valuation of USD $3 billion
with a 24-hour trading volume approaching USD $900 million.</p><p>The US Securities and
Exchange Commission (SEC) raised concerns about the status of BUSD, alleging
that it was unregistered security. The SEC's stance was communicated through a
Wells notice issued to Paxos on February 13. Concurrently, NYDFS services <a href="https://www.financemagnates.com/cryptocurrency/paxos-stops-busd-mint-after-sec-action-binances-cz-calms-funds-are-safe/" target="_blank" rel="follow">ordered
Paxos to halt the issuance of BUSD</a>.</p><p>Notably, to facilitate
this shift, Binance has provided options for users to trade their BUSD balances
for FDUSD at zero trading fees or convert their BUSD holdings to FDUSD at a 1:1
ratio. According to the exchange's statement, the phased withdrawal of BUSD
support encompasses various facets of its platform.</p><p>FDUSD is a <a href="https://www.financemagnates.com/terms/s/stablecoin/">stablecoin</a> <a href="https://www.financemagnates.com/cryptocurrency/hong-kongs-new-crypto-regime-kicks-in/" target="_blank" rel="follow">launched
by Hong Kong-based</a> trust
company First Digital Group in June. The USD-based stablecoin can execute
contracts, escrow services, and insurance without intermediaries and operate on
the BNB Smart Chain. The timing of FDUSD's launch aligned with the commencement
of retail cryptocurrency trading in Hong Kong under newly established
guidelines.</p><blockquote><p lang="en" dir="ltr">First Digital, a Hong Kong licensed trust company, launches a new USD pegged stablecoin (FDUSD), on <a href="https://twitter.com/hashtag/BNB?src=hash&amp;ref_src=twsrc%5Etfw">#BNB</a> Smart Chain.</p>— CZ