In an important development in the cryptocurrency market, Binance announced that it will stop support for its stablecoin BUSD, which currently has a market capitalization of $16 billion. This decision comes after a change in leadership, with CZ stepping down as CEO of Binance.
The exchange has set a timeline for the BUSD phase-out, stating that support will end on December 15, 2023. Binance users are being given the option to convert their BUSD holdings to stablecoins FDUSD by FD121 Ltd. without incurring transaction fees. This fee waiver will be in effect until December 31, 2023, when BUSD withdrawals will cease in most regions, except Kazakhstan, Poland, Italy, France and Japan. From this date, any remaining BUSD holdings will be automatically converted to FDUSD.
The departure from BUSD was preceded by a legal action in February 2023, when the New York Department of Financial Services (NYDFS) instructed Paxos to stop issuing BUSD. Paxos partnered with Binance in 2019 to launch BUSD, which grew to become the third largest stablecoin on the market.
Despite the ongoing changes in Binance’s ecosystem and the recent leadership transition, BUSD has remained stable, trading at $1. Stablecoins even increased slightly in value and trading volume. Binance has assured users that BUSD will continue to be redeemable until February 2024, providing plenty of time for holders to adjust their positions in light of the upcoming changes.
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