Binance has announced plans to phase out support for its native stablecoin BUSD (Binance USD). The exchange will delist BUSD trading pairs for both spot and margin trading, but has not yet provided a specific date for these actions.
In an official press release, Binance said it encourages users to convert their BUSD holdings into other assets before February 2024. As part of this process, the platform will stop offering its branded tokens as loanable assets on September 6. BUSD tokens pegged via BNB Chain, Avalanche, Polygon, and Tron will be discontinued on September 7.
The decision to end support for BUSD comes after the New York Department of Financial Services (NYDFS) ordered stablecoin issuer Paxos to stop minting BUSD in February. Binance CEO Changpeng Zhao previously said that BUSD will gradually exit over time, but the specific timetable is still unclear.
However, some services using BUSD will continue to function as before. Deposits and withdrawals of the BUSD token via Ethereum will continue, as will deposits on Polygon, BNB Chain, Avalanche, and Tron.
Meanwhile, Binance plans to phase out BUSD at various stages of its product range. Services such as futures, earn, loans, gift cards, and payment products will stop using BUSD starting in early September and continuing until December.
This announcement reflects the regulatory challenges Binance continues to face around the world. The exchange is under investigation by law enforcement agencies in multiple jurisdictions, including for alleged violations of U.S. securities laws, money laundering in France, and allegations of operating a pyramid scheme in Brazil. Despite these challenges, Binance is still launching new products, such as a cryptocurrency-to-bank payment solution called Send Cash that was recently launched in several Latin American countries.
Binance launched its native stablecoin in 2019. BUSD was established in partnership with US-based Paxos, its issuer and custodian of fiat reserves. Since then, the $16 billion stablecoin has been available for direct purchase and redemption on the Paxos platform and is being traded with other exchanges.
The SEC also plans to sue Paxos for violating investor protection rules. The issuer has been notified of planned enforcement action as the regulator claims Binance USD is an unregistered security.
