Binance will cease support for BUSD in 2024 and encourages users to make a switch before the deadline.
Binance announced it would stop supporting BUSD products and encouraged users to convert their BUSD to other stablecoin before February 2024.
Binance assured that “BUSD will always be backed 1:1 by USD”, but the situation has likely been impacted by the decision from a blockchain platform Paxos, regarding their own timeline for the token's support.
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On August 31st, Binance issued a general announcement encouraging users to exchange their BUSD tokens for other stablecoins, with some emphasis on FDUSD, stating the tokens can be traded with each other at zero trading fees or exchanged at a 1:1 ratio.
The company also reassured that the support for various other tokens and coins on the exchange will continue.
According to the statement, on September 7, Binance plans to halt BUSD borrowings on cross-margin. On the same day, the company will stop withdrawals of Binance-Peg BUSD using BNB Chain, Avalanche, Polygon and Tron networks. However, both deposits and withdrawals through the Ethereum network will continue until further notice.
Other BUSD token functions will be gradually phased out over September and October. Users are encouraged to keep an eye out for separate announcements regarding additional changes.
Binance’s decision to no longer support BUSD comes after Paxos announced it would end its relationship with the exchange regarding the minting of its branded stablecoin.
Back in February, Paxos assured its customers:
BUSD will remain fully supported by Paxos and redeemable to onboarded customers through at least February 2024. New and existing Paxos customers will be able to redeem their funds in US dollars or convert their BUSD tokens to Pax Dollar (USDP), a regulated US dollar-backed stablecoin also issued by Paxos Trust.
Reportedly, the end to token minting came after Paxos received a warning from the United States Securities and Exchange Commission (SEC) that BUSD is considered by the agency as unregistered security.
