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Binance Announces Feb. 2024 Funeral for BUSD, Pushes New Stablecoin (FDUSD)

Published August 31, 2023 11:34 AM
Omar Elorfaly
Published August 31, 2023 11:34 AM

Key Takeaways

  • Binance announced the end of its support for BUSD stablecoin.
  • The exchange pushes users to opt for Hong Kong-born FDUSD.
  • Users may exchange BUSD and FDUSD at 1:1.

BUSD token issuer Paxos said in a statement  earlier this year that it “will cease issuance of new BUSD tokens as directed by and working in close coordination with the New York Department of Financial Services (NYDFS).”

Binance has now announced it will end all trade pairs connected to the stablecoin, giving customers the opportunity to trade it for other tokens, including First Digital USD (FDUSD), a stablecoin launched by a Hong Kong-based trust.

FDUSD On Binance

The market reacted in a staggeringly positive way as Binance announced  the listing of FDUSD on its platform, on August 3rd. FDUSD’s market cap surged from $20M to more than $260M in just two days.

After Binance announced its decision to halt BUSD trades and started pushing its customers to trade its native stablecoin for FDUSD, the latter experienced serious gains in its market cap, reaching over $340M.

FDUSD market cap soars following Binance announcements
FDUSD market cap skyrockets after Binance announcements

Abandoning BUSD

Although BUSD carries Binance’s namesake, the exchange took an executive decision to halt all trade pairs tied to BUSD.

In a blog post , the exchange said: “As Paxos has halted minting of new BUSD, Binance will gradually cease support for BUSD products. Announcements will be released for any impacted services. Please be assured that BUSD will always be backed 1:1 by USD.

Binance will continue to support multiple stablecoins and digital assets on its platform. Users are encouraged to convert their BUSD assets into other available assets on Binance prior to February 2024. Users may trade their BUSD balances for FDUSD at zero trading fees, or convert their BUSD balances to FDUSD at 1:1.”

Binance also added: “At 2023-09-07 06:00 (UTC), Binance will suspend BUSD borrowings on Cross Margin. From 2023-10-19 06:00 (UTC), Cross Margin and Portfolio Margin users will no longer be able to transfer in additional BUSD as new collateral to Cross Margin Wallet. Users can still transfer in other tokens as collateral.”

Moreover, the exchange told its customers that they may “manually convert their BUSD balances to FDUSD at a 1:1 ratio using Binance Convert until further notice. Please note that the 1:1 conversion rate is only applicable for converting BUSD to FDUSD, and not the other way around.”

Paxos also reported  that “BUSD will remain fully supported by Paxos and redeemable to onboarded customers through at least February 2024. New and existing Paxos customers will be able to redeem their funds in US dollars or convert their BUSD tokens to Pax Dollar (USDP), a regulated US dollar-backed stablecoin also issued by Paxos Trust.” 

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