Binance, the world’s largest cryptocurrency exchange by trading volume, has announced that it will gradually cease support for its BUSD stablecoin, which is pegged to the US dollar, by February 2024. The move follows Paxos’ decision to halt minting of new BUSD earlier this year, due to regulatory issues.
According to an announcement on Thursday, Binance will delist BUSD as a loanable asset on Sept. 6 and will stop withdrawals of Binance-peg BUSD tokens via BNB Chain, Avalanche, Polygon, and Tron on Sept. 7. Binance will also remove BUSD from spot and margin trading pairs by Feb. 28, 2024.
Binance assured users that BUSD will always be backed 1:1 by USD and redeemable until Feb. 28, 2024. Binance also encouraged users to convert their BUSD to other stablecoins prior to February 2024 and offered zero trading fees for trading BUSD for First Digital USD (FDUSD), another stablecoin that was listed on Binance in July.
BUSD was launched in September 2019 as a collaboration between Binance and Paxos, a regulated trust company and stablecoin issuer. BUSD was approved by the New York Department of Financial Services (NYDFS) and became one of the first regulated stablecoins in the US.
However, in February 2021, NYDFS ordered Paxos to stop issuing BUSD, citing concerns over the compliance and transparency of the stablecoin. NYDFS also accused Binance of violating the terms of the BUSD approval by offering unregistered crypto derivatives products to US customers.
Binance has been facing increased regulatory scrutiny and pressure from various authorities around the world, including the US, the UK, Germany, Japan, and Canada. Binance has been accused of operating without proper licenses, facilitating money laundering, evading taxes, and manipulating the market.
Binance CEO Changpeng Zhao, also known as CZ, said in February that BUSD will slowly wind down over time, but did not specify the exact timeline. He also said that Binance will continue to support other stablecoins, such as USDT, USDC, and DAI.
source : cointeleghraph