April 19, 2024
Binance announces the end of the BUSD era, encourages users to adopt a new stablecoin.
Latest Cryptocurrency News

Binance Signals End of BUSD Era: Users Advised to Embrace New Stablecoin

Cryptocurrency exchange Binance has initiated a call to action for its users, urging them to initiate the conversion of their holdings in the Binance USD stablecoin (BUSD) into other accessible assets, which include a recently introduced stablecoin. This move comes as part of Binance’s strategy to gradually phase out its support for BUSD, a decision aligned with Paxos’ parallel plan to discontinue BUSD redemption by February 2024.

Addressing the matter officially for the first time, Binance released a statement on August 31 that corroborates earlier speculations. This announcement was prompted by the circulation of screenshots shared by numerous users, who displayed a notification pop-up on their mobile app indicating the impending suspension of support for BUSD.

Within the statement, Binance has encouraged its users to either trade or convert their BUSD holdings into First Digital USD (FDUSD), a stablecoin that made its debut in June. FDUSD was launched by the Hong Kong-based trust company First Digital Group and was subsequently listed on Binance in late July. The exchange emphasized that the transition from BUSD to FDUSD entails no fees, and to bolster this effort, Binance delisted eight trading pairs involving BUSD and FDUSD on August 30.

Notably, Binance had previously incentivized the use of BUSD by introducing zero-fee trading pairs for FDUSD with major cryptocurrencies like Bitcoin and Ether. The decision to terminate support for BUSD by Binance seems to follow actions taken by the United States Securities and Exchange Commission (SEC) on February 13. The SEC issued a “wells notice” to Paxos, alleging that BUSD was an unregistered security.

Coinciding with the SEC’s move, the New York Department of Financial Services also intervened by directing Paxos to cease the issuance of BUSD on the same day.

Image by pixabay

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