Binance, the largest cryptocurrency exchange globally, recently revealed its decision to discontinue support for the stablecoin asset BUSD. As part of this transition, Binance is encouraging its users to initiate a swap for their BUSD holdings, as the exchange will gradually phase out the BUSD markets. This move by Binance reflects the ever-evolving nature of the cryptocurrency space, where market trends and user preferences can lead to changes in supported assets and trading options.
Binance Ending BUSD Support, Users Must Swap
On August 31, Binance made a significant announcement regarding the phased discontinuation of BUSD support. Users were informed of the need to convert their BUSD holdings into other stablecoins before February 2024. The decision followed Paxos, the issuer of BUSD, halting the minting of this stablecoin. To facilitate the transition, Binance introduced a no-fee swap program, allowing customers to convert BUSD balances into FDUSD.
Starting September 7, Binance suspended BUSD loans on cross margins. Subsequently, on October 19, users on cross-margin and portfolio margin services could no longer use additional BUSD as new collateral in the cross-margin wallet. Additionally, withdrawals of Binance-Peg BUSD tokens via various networks like BNB Chain, Avalanche, Polygon, Tron, and Optimism were slated to cease from September 7.
Binance indicated that support for BUSD would continue “until further announcements,” and outlined several other phase-out dates related to its loan and earn programs. The supply of BUSD had been dwindling after U.S. regulators instructed Paxos to halt BUSD minting. Despite this, Binance emphasized that the stablecoin would always maintain a 1:1 backing with USD, offering reassurance to users.
In terms of stablecoin holdings, Binance’s control extended to a significant portion of TUSD supply, accounting for over 5% of its reserves, according to Nansen analytics. Additionally, the exchange asserted its influence over more than $17 billion worth of Tether (USDT). This move highlighted Binance’s evolving role in the cryptocurrency space, demonstrating its efforts to adapt to changing market dynamics while maintaining its commitment to stablecoin support.