Late in August, #Binance a popular #cryptocurrency exchange, announced that it will be discontinuing BUSD support. This comes at a time when manufacturing of the stablecoin has been halted due to an encounter with authorities. The stock exchange has begun the process of ending its stablecoin support.
On Thursday, September 14, Binance announced through its official X (formerly Twitter) account that it will begin burning a number of Binance-pegged coins. Four of the five tokens indicated as candidates for destruction were BUSD tokens on various blockchains.
When the Binance-pegged tokens are burnt on the listed blockchains, the exchange will release the corresponding number of tokens that were originally utilised as collateral.
A large quantity of unused Binance Tokens will be destroyed later today.
The collateralized number of tokens on their respective networks will be issued.
TUSDOLD (BSC), BUSD (MATIC), BUSD (BSC), BUSD (BNB), and BUSD (BSC) are all tokens (TRX)
September 14, 2023 — Binance (@binance)
The BUSD coins are listed on four different networks: the Polygon (MATIC) network, the Tron (TRX) network, the BSC network, and the BSC network (BNB). The exchange also said that BSC's TUSDOLD tokens will be burnt, making BUSD the sole non-BSC token on this list to be destroyed.
In this situation, the collateral will be the value of the burnt tokens on Binance. If 1,000 BUSD are burned on the MATIC network, the same amount on the local blockchain will be made available via the trading platform.
When the U.S. Securities and Exchange Commission (SEC) claimed the BUSD stablecoin was an unregistered securities and issued a Wells Notice to issuer Paxos in early 2023, the #BUSD stablecoin came under assault for the first time. In doing so, the agency signalled its determination to take legal action.
The New York State Department of Financial Services (NYDFS) followed the SEC's lead and requested that the issuer cease producing new tokens. Paxos, the issuer of BUSD, severed connections with Binance after receiving criticism from the New York Department of Financial Services for its partnership with the cryptocurrency exchange.
Stablecoin use and market capitalization have declined since the initial move by authorities. As of this writing, the stablecoin's market worth of $2.5 billion places it at the 26th spot among cryptocurrencies, down from being in the top 10 at one point.
Moreover, Binance has said that they would end all service related to the stablecoin by the year 2024. Binance's full withdrawal is anticipated to occur soon following Paxos's announcement that it would stop all BUSD redemptions in February 2024.
The stablecoin, however, has been remarkably steady with respect to its dollar peg. Notwithstanding the regulatory storm, its value relative to the US dollar has remained stable at around $1.
