Binance, a leading cryptocurrency exchange, will terminate borrowing and lending services related to its native stablecoin, Binance USD (BUSD), effective October 25, according to an announcement made on October 3. The exchange plans to close all outstanding BUSD loan and collateral positions by the month’s end. Although users will no longer be able to utilize BUSD for such services, they will retain the ability to borrow and lend on Binance with other stablecoins like Tether (USDT), Dai, TrueUSD (TUSD), and USD Coin (USDC). Presently, Binance offers an estimated annual percentage yield of 3% for lending BUSD.
A report from Cointelegraph on August 31 stated that Binance intends to shut down all services connected to its BUSD stablecoin by 2024. Earlier, on February 13, Paxos, a New York-based fintech firm and the issuer of BUSD, announced the termination of its relationship with Binance amidst the latter’s ongoing legal conflicts with the U.S. Securities and Exchange Commission. Paxos plans to cease redemptions from BUSD to U.S. cash and Treasuries in February 2024, while new BUSD minting has been temporarily suspended.
Prior to the announcement regarding its discontinuation, BUSD had grown to become one of the largest stablecoins, attaining a peak market capitalization of $23 billion in November 2022, which has since declined to $2.23 billion at the moment of reporting.
BUSD and its associated services are being phased out systematically. Last month, Binance paused BUSD withdrawals through several blockchains – BNB Chain, Avalanche, Polygon, Tron, and Optimism – while maintaining them on the Ethereum network. Meanwhile, BUSD deposits continue to be accepted across all blockchains. Binance has advised users to transition their BUSD balances into fiat or alternative cryptocurrencies by the ensuing year.
Get $200 Free Bitcoins every hour! No Deposit No Credit Card required. Sign Up