Following the departure of its founder Changpeng Zhao, commonly known as CZ, from the CEO position, Binance, the world's leading cryptocurrency exchange by trading volume, has announced a significant shift in its ecosystem. The company is set to discontinue support for its BUSD stablecoin, starting from December 15, 2023.
This decision comes after Paxos, the issuer of BUSD, was instructed by the New York Department of Financial Services earlier in the year to halt the minting of the coin. Binance had previously indicated in August that it would gradually phase out the stablecoin. In a recent social media update, Binance confirmed the end of support for BUSD products, offering users the option to trade or convert their BUSD balances to FDUSD, another stablecoin by FD121 Ltd., without incurring trading fees.
Binance outlined that while users can redeem their BUSD until February 2024, withdrawals of the stablecoin will be stopped from December 31, 2023. After this date, any remaining BUSD in user accounts, except in specific countries like Japan, France, Italy, Poland, and Kazakhstan, will be automatically converted to FDUSD at a 1:1 rate. Deposits of BUSD into Binance will still be possible, with manual conversion to FDUSD available until further notice.
Paxos' BUSD, launched in partnership with Binance in 2019, was once the world's third-largest stablecoin, boasting a market capitalization surpassing $16 billion. However, the latest data shows a decline in its value and market cap. As of early Thursday, BUSD was trading at $1, witnessing a modest increase over the past 24 hours and week.
The change in Binance's stablecoin strategy is part of a broader transformation within the company, closely following the high-profile change in leadership with CZ's step down from his role as CEO and chairman of Binance.US's board. These developments mark a significant shift in Binance's operations and strategy, reflecting the evolving landscape of the cryptocurrency market.
