Binance to Phase Out BUSD Support by February 2024 Amid Paxos Minting Halt
Rebeca Moen Sep 01, 2023 03:05
Binance will discontinue support for Binance USD (BUSD) by February 2024, affecting trading, futures, and loans. Users holding BUSD are advised to convert their assets to other stablecoins or digital assets on Binance, with a 1:1 conversion rate.
Binance, a leading cryptocurrency exchange, will cease support for Binance USD (BUSD) by February 2024 following Paxos's decision to halt new BUSD minting. The move impacts a range of Binance services, including spot and margin trading, futures, and loans.
Immediate Action Required for Users
Users holding BUSD are advised to convert their assets into other stablecoins or digital assets supported on Binance. The exchange offers zero trading fees for converting BUSD to FDUSD, with a 1:1 conversion rate applicable only for BUSD to FDUSD conversions.
What is FDUSD?
First Digital USD (FDUSD) is issued by First Digital Group, which includes First Digital Trust, a leading qualified custodian headquartered in Hong Kong. FDUSD is backed 1:1 with high-quality cash and cash equivalents held in segregated accounts in regulated financial institutions. The stablecoin is designed to be a programmable digital asset compatible with next-generation Web3 technologies. It debuted on Binance on July 26, 2023, with a zero-maker fee limited-time promotion for FDUSD trading pairs.
Timeline of Changes
Deposits & Withdrawals: Effective September 7, 2023, withdrawals of Binance-Peg BUSD tokens via BNB Chain, Avalanche, Polygon, and Tron will be halted.
Cross Margin: Starting September 7, 2023, BUSD borrowings on Cross Margin will be suspended.
Futures: Binance will phase out BUSD-margined perpetual contracts, with dates to be announced.
Earn Products: BUSD subscriptions in Simple Earn Flexible Products and Auto-Invest will be discontinued starting October 13, 2023, and September 15, 2023, respectively.
Loans: BUSD will be removed as a loanable and collateral asset from September 6, 2023.
Financial Instruments Affected
The cessation of BUSD support will affect various financial instruments on Binance, including spot and margin trading pairs, futures contracts, and loan products. Users should adjust their portfolios accordingly.
Market Implications
While Binance assures a 1:1 USD backing for existing BUSD, the halt in new minting by Paxos signals a significant shift in the stablecoin market. The full impact on Binance's market position remains to be seen.
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