Crypto exchange Binance will cease borrowing and lending services for its native stablecoin Binance USD (BUSD) by October 25.
According to the October 3 announcement, the exchange will close all outstanding BUSD loan and collateral positions by the end of the month. Users would still be able to borrow and lend on Binance using stablecoins such as Tether (USDT), Dai, TrueUSD (TUSD), and USD Coin (USDC). Currently, users can lend their BUSD on Binance at an estimated annual percentage yield of 3%.
On August 31, Cointelegraph reported that Binance will cease all services related to its BUSD stablecoin by 2024. Previously, on February 13, New York fintech firm Paxos, the issuer of the BUSD stablecoin, said it would end relations with Binance due to the latter's ongoing litigation with the U.S. Securities and Exchange Commission. Paxos said it would end redemptions from BUSD to underlying U.S. cash and Treasuries in February 2024, with new minting of BUSD halted for the time being.
Before the termination announcement, BUSD was one of the largest stablecoins, reaching a peak market capitalization of $23 billion in November 2022. It has since fallen to $2.23 billion at the time of publication.
The termination of BUSD and related services has occurred in phases. Last month, the exchange suspended BUSD withdrawals via BNB Chain, Avalanche, Polygon, Tron and Optimism but left them open on the Ethereum network. BUSD deposits, on the other hand, remain open across all blockchains, with the exchange urging users to convert their BUSD balances into fiat or other crypto by next year.
FYI: Binance will stop BUSD in 2024— Nu Brave (@NuBraveIN) August 30, 2023
According to an official announcement on crypto exchange Binance’s app, the exchange pops up a notification for users that they will stop supporting BUSD in 2024.
This is an elignment with Paxos phase out for purchasing BUSD by February… pic.twitter.com/XiRPy71b3p
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