Binance Shifts Gears: BUSD Lending Ends, Users Urged to Act

Binance has announced the discontinuation of its Binance USD (BUSD) lending services by October 25, aligning with its plan to phase out all BUSD-related offerings by 2024.

This decision mirrors Paxos’ stance, a New York fintech firm that intended to terminate its association with Binance due to legal issues with the SEC. Paxos had also outlined its plan to cease BUSD redemptions to U.S. cash and Treasuries by February 2024 and temporarily halted the creation of new BUSD tokens.

Before this announcement, BUSD reached a peak market capitalization of $23 billion in November 2022, but its value has since dropped to $2.23 billion.

In a recent move, Binance suspended BUSD withdrawals via multiple blockchain networks, maintaining the service only on the Ethereum network. Users have been encouraged to transition BUSD assets to fiat or alternative cryptocurrencies within the coming year.

Furthermore, Binance has advised its users to transfer BUSD holdings to other stablecoins, with a focus on First Digital USD (FDUSD), recently introduced by First Digital Group on Binance in late July.

These actions are in response to allegations from the U.S. SEC that BUSD functions as an unregistered security, leading the New York Department of Financial Services to instruct Paxos to halt BUSD issuance.

As Binance navigates regulatory challenges, users should stay informed and make informed choices regarding their BUSD assets.

Author

Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.