Cryptocurrency exchange Binance has officially confirmed its plans to phase out support for Binance USD (BUSD) by February 2024. This move aligns with Paxos, which had earlier decided to cease BUSD redemptions.
The decision to discontinue BUSD support was initially revealed when numerous users shared screenshots of a pop-up notification on their mobile app. Binance has now issued an official statement encouraging users to trade or convert their BUSD holdings into First Digital USD (F DUSD). FDUSD is a stablecoin launched in June by the Hong Kong-based trust company First Digital Group, which had previously introduced the currency on the exchange late last year. FDUSD became available for purchase in July. Binance has also facilitated BUSD-to-FDUSD trading, offering free conversions, and subsequently delisted eight BUSD trading pairs on August 30. The exchange had previously incentivized the use of stablecoins by offering a zero-fee trading pair for FDUSD against Bitcoin and Ether.
Binance's decision to discontinue BUSD support appears to be a response to the US Securities and Exchange Commission's declaration that BUSD constitutes an unregistered security, as stated in a notice to Paxos on February 13. On the same day, the New York Department of Financial Services issued an order to Paxos to halt the issuance of BUSD.
As a result, Binance is urging its users to transition to FDUSD, indicating a broader shift in the exchange's strategy regarding stablecoins and their regulatory compliance.
