Binance said support for BUSD would end by February next year.
Cover art/illustration via CryptoSlate
Binance has advised its users to convert their Binance USD (BUSD) holdings to First Digital USD (FDUSD) as it intends to phase out support for BUSD by February 2024, according to an Aug. 31 statement.
The exchange said it would “gradually” end support for several BUSD products, including delisting its spot and margin trading pairs, alongside its removal as a loanable asset on its platform, among other things. Meanwhile, Binance assured its users that BUSD would always be backed 1:1 by USD till it ends its support next year.
Binance attributed its decision to the regulatory issues surrounding the stablecoin. Earlier in the year, Paxos, BUSD issuer, said it would suspend the stablecoin issuance following scrutiny from U.S. regulators. At the time, the crypto company received a wells notice from the U.S. Securities and Exchange Commission (SEC), which classified the stablecoin as a security.
While Binance and Paxos have vehemently rejected this classification, the crypto community promptly deserted the stablecoin, with its circulating supply dropping to around $3 billion from a peak of more than $20 billion recorded last year.
FDUSD gains traction on Binance
Meanwhile, Binance has begun to push FDUSD as a viable alternative to BUSD for its users. FDUSD is a stablecoin issued by Hong Kong-based First Digital Group and was listed on the platform on July 26.
According to a post on its official X handle, First Digital revealed that the stablecoin’s market capitalization surpassed $300 million within the first month of its launch, and it was integrated into several products on the exchange, including its peer-to-peer platform. Additionally, Binance introduced zero trading fees for some of its pairings.
However, despite enjoying Binance support, the stablecoin is yet to gain traction within the community as it is only available on less than five crypto exchanges.
Besides that, FDUSD’s 24-hour trading volume is under $100 million, according to data by CoinMarketCap.
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