Binance will end support for BUSD stablecoin in December

Major cryptocurrency exchange Binance announced it will cease support for all Binance USD (BUSD) products starting on Dec. 15 following Paxos halting the minting of new coins.

In a Nov. 29 notice, Binance said users should withdraw or convert their existing BUSD on the exchange into other assets before Dec. 15. Starting Dec. 31, Binance will disable withdrawals for BUSD. At that point, existing balances will automatically be converted into First Digital USD (FDUSD) for certain users.

In accordance with past communications, #Binance will cease support for BUSD products starting on December 15, 2023.

Users may trade or convert their BUSD balances for $FDUSD at zero trading fees.

Full details here https://t.co/usRi09uOhi

— Binance (@binance) November 29, 2023

The move was the latest by Binance in winding down services for its native stablecoin. The exchange announced it planned to gradually stop support for BUSD before February 2024, starting with ceasing borrowing and lending services for the stablecoin in October.

In February, the United States Securities and Exchange Commission suggested BUSD was an unregistered security in a Wells notice issued to Paxos — the issuer behind the stablecoin. The New York Department of Financial Services also ordered Paxos to halt the issuance of BUSD.

Related: Binance.US asks users to convert USD into stablecoins for withdrawals

On Nov. 21, U.S. authorities announced they had reached a settlement with Binance and former CEO Changpeng Zhao, requiring them to pay $4.3 billion. Zhao resigned as CEO as part of the settlement, with the exchange’s head of regional markets, Richard Teng, stepping into his shoes.

Before August, BUSD was one of the largest stablecoins by market capitalization, reaching a peak of more than $23.3 billion in November 2022. At the time of publication, the stablecoin’s market cap was roughly $1.7 billion, falling by more than 92% in 12 months.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom