Binance will cease support for BUSD stablecoin, remaining balances will be converted to FDUSD

Binance, the leading crypto exchange, has announced its decision to discontinue support for Binance USD (BUSD), effective December 15, 2023. The exchange plans to convert customer funds in BUSD (with the exception of users from Poland, Italy, France, Japan, and Kazakhstan) to a new stablecoin — First Digital USD (FDUSD). Users are advised to withdraw their BUSD or convert them into other stablecoins or cryptocurrencies before the specified deadline.

Binance will cease support for BUSD stablecoin, remaining balances will be converted to FDUSD

Created in 2019 as part of Binance’s project “Venus” focused on developing localized stablecoins worldwide, BUSD served as the official token of the exchange despite being issued by a third-party company. Its capitalization experienced significant growth towards the end of 2020, reaching $23.5 billion by December 2022. However, at the beginning of 2023, the capitalization declined by 30%, settling at $16.5 billion.

Earlier this year, the Securities and Exchange Commission (SEC) filed a lawsuit against BUSD’s issuer, Paxos Trust, alleging that this digital asset qualifies as an unregistered security. Consequently, the New York State Department of Financial Services ordered Paxos to stop issuing new BUSD tokens. This regulatory action contributed to a decrease in the stablecoin’s capitalization and prompted investors to explore alternative assets.

In August, the company made an official announcement regarding the planned discontinuation of BUSD support. Simultaneously, on August 4, the exchange introduced new trading pairs, allowing users to trade BTC and ETH for FDUSD. Currently, the market capitalization of this new token stands at $775.6 million.

Earlier, Binance committed to paying a substantial fine of $4.3 billion as part of an agreement with US authorities. In connection with this, Changpeng Zhao stepped down as the company’s CEO, and as a part of the deal, he is also obligated to pay $50 million in fines for violating the Bank Secrecy Act. Following Zhao’s resignation, Richard Teng assumed the role of the CEO of the exchange.

If you haven’t registered on Binance yet, you can create an account with us and enjoy additional bonuses from the VipDeposits loyalty program.

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