News View Non-AMP

Binance To End of Support for BUSD Stablecoin

Published by
Qadir AK

Binance, one of the world’s largest cryptocurrency exchanges, has made a significant move by announcing the cessation of support for the Binance USD (BUSD) stablecoin. This decision, effective from December 15, 2023, follows the regulatory pressures faced by Paxos, the issuer of BUSD.

The decision is a direct consequence of the regulatory actions in February, where the U.S. Securities and Exchange Commission (SEC) flagged BUSD as a potential unregistered security. The New York Department of Financial Services (NYDFS) ordered Paxos to stop issuing BUSD. This regulatory scrutiny has led Binance to phase out support for its native stablecoin.

Impact on Users and BUSD Market

Users of Binance will need to withdraw or convert their BUSD into other assets before December 15. Post-December 31, the exchange will disable withdrawals, and existing BUSD balances will automatically convert into First Digital USD (FDUSD) for specific users. This move is part of Binance’s broader strategy to comply with regulatory norms and shift its focus to other stablecoins.

Before the regulatory issues, BUSD was among the largest stablecoins by market capitalization, peaking at over $23.3 billion in November 2022. However, it has since experienced a sharp decline, with its market cap currently standing at approximately $1.7 billion, a drop of over 92% in 12 months.

New CEO and Compliance Focus

Richard Teng has taken the helm following a $4.3 billion settlement with U.S. authorities and the resignation of former CEO Changpeng Zhao. This leadership change underscores Binance’s commitment to compliance and adapting to the evolving regulatory landscape.

Binance had already initiated the process of reducing its reliance on BUSD, halting borrowing and lending services for the stablecoin in October. The recent announcement marks a significant step in this direction, aligning with the regulatory expectations.

What This Means for the Crypto Market

This development highlights the growing regulatory scrutiny of stablecoins and their challenges. It also indicates a shift in the market dynamics, with other stablecoins potentially filling the gap left by BUSD. Following the FTX lawsuit, the U.S. regulators have been stringent on rules and policies, giving crypto firms a hard time. However, the crypto community hopes that the cloud will clear soon in the market with more regular clarity from the officials.

Binance’s decision to cease support for BUSD marks a turning point for the exchange. As it navigates the regulatory waters, Binance will likely focus more on compliance and adapting its services to meet global legal frameworks.

Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

Recent Posts

DeFi Development Corp Files Form S-3 With U.S. SEC to Raise $1B To Purchase Solana (SOL)

DeFi Development Corp follows a similar approach to SOL Strategy to issue debt securities to…

April 26, 2025

Kraken Exchange to List Cardano-based Memecoin Snek on April 28: SNEK Price Gains Over 16%

The listing of SNEK on Kraken is a massive gain for the wider Cardano ecosystem.…

April 26, 2025

Uniswap (UNI) Price Forecast: Dead Cat Bounce or Momentum Shift Ahead?

UNI price has largely followed Ethereum price action in the ongoing wider crypto recovery. The…

April 26, 2025

Sui’s Skyrocketing Trend Now Eyes $5 Breakout: What’s Next for SUI Price?

Sui’s token price has been on a strong rally over the past few days. While…

April 26, 2025

SEC’s Atkins Signals Change in Crypto Policies, Says Agency Can Act Alone

At his first public event as SEC chairman, Paul Atkins made it clear he’s backing…

April 26, 2025

Dogecoin Price Prediction 2025: Will DOGE Reach $1 This Summer?

The markets are experiencing a significant shift in momentum, with the bulls gaining the upper…

April 26, 2025