- Binance, the world’s largest cryptocurrency exchange, has decided to gradually reduce support for its own stablecoin, BUSD.
- The decision to reduce support for Binance USD (BUSD) is due to regulatory pressures and international struggles.
- The market impact of this decision is expected to be negative.
Binance, the world’s leading cryptocurrency exchange, has made headlines with its shocking announcement to gradually reduce support for its own stablecoin, Binance USD (BUSD).
Binance Reduces Support for Binance USD
As expected, the main reason for this decision is the increasing regulatory pressure and the struggles Binance is facing in almost every country. Binance USD, which was launched as Binance’s own stablecoin and even carries the Binance name, now seems to be slowly being abandoned.
Paxos, the issuer of BUSD, had already stopped issuing new BUSD, and Binance has responded by gradually reducing and eventually ending support for BUSD on its platform. While it was stated that BUSD will always have 1:1 support with USD, it was conveyed that other stablecoins on the platform will gradually take its place.
In a detailed explanation on the subject, Binance emphasized that users will be able to swap their BUSD balances for other assets until February 2024. It was stated that BUSD can be swapped for FDUSD without any transaction fee, and that there is a 1:1 collateral between BUSD and FDUSD.
BUSD Withdrawal and Deposit Transactions Are Stopping
Binance first stated that it will delist BUSD from spot and margin transactions. It was also stated that separate delist announcements will be made. Although it was mentioned that users can reach the same function by turning to other stablecoins, Binance announced that it will also end the BUSD lending operation as of September 7, 2023. As of this date, users will no longer be able to use BUSD as new collateral.
As of September 7, it was announced that BUSD token withdrawal will also stop for BNB Chain, Avalanche, Polygon, and Tron networks. It is stated that withdrawals based on the Ethereum network will continue until a new announcement is made.
Depositing BUSD tokens via the BNB Chain, Avalanche, Polygon, and Tron networks will continue to be supported until a new announcement is made. This move certainly shows that surprising events related to Binance continue to occur and Binance still seems to be in trouble.
Conclusion
This decision by Binance to reduce support for its own stablecoin, BUSD, is a significant development in the cryptocurrency market. The impact of this decision on the market and on Binance’s position as a leading cryptocurrency exchange will be closely watched by investors and enthusiasts alike.
