Cryptocurrency exchange Binance has announced its decision to gradually end support for its BUSD stablecoin. Binance USDwill removed from spot and margin trading pairs, and users are require to convert their Binance USD holdings into other assets by February of next year. In the short term, Binance will delist Binance USD as a loanable asset on September 6 and will halt withdrawals of Binance-peg BUSD tokens through various chains on September 7.
The anticipation of ending support for Binance USD arose after Paxos. The issuer of the stablecoin, was instructed to stop minting the coin in February. Binance’s CEO, Changpeng Zhao, previously mentioned that Binance USD would wind down gradually, but the exact timeline was uncertain. However, the recent decision to cease Binance USD loans on short notice suggests an expedited timeline.
Binance reassures users that Binance USD will always backed by USD in a 1:1 ratio. Despite the gradual phasing out of support for the stablecoin. Binance USD currently has a 24-hour trading volume of nearly $900 million, according to CoinMarketCap data.
Binance USD faced regulatory challenges after the New York Department of Financial Services (NYDFS) ordered Paxos to stop issuing it in February. This regulatory issue led to a lawsuit against Binance by the U.S. Commodity and Futures Trading Commission (CFTC) on allegations of offering unregistered crypto derivative products, which goes against federal law.
Recently, the U.S. Securities and Exchange Commission (SEC) submitted a sealed motion related to Binance, indicating the possibility of further legal challenges for the exchange. This motion allows the SEC to share sensitive or confidential information without making the contents public.