Binance’s Bold Move
Binance, the behemoth in the crypto exchange, recently made a significant announcement that’s been creating ripples in the crypto community. The exchange has declared that it’s set to gradually pull the plug on Binance USD (BUSD) across its numerous services. This monumental decision stems from Paxos putting a halt to minting new BUSD tokens. Besides, Binance reiterates that BUSD will remain backed at a 1:1 ratio with the U.S. dollar, ensuring users of its continued value.
How Does This Impact Users?
However, the platform is urging its users to take action. Binance recommends that before February 2024, users transition their BUSD holdings to other stablecoins on their platform. Moreover, as a particular concession, users can trade BUSD for FDUSD free of trading charges or make a straight swap at a 1:1 ratio.
Starting September 7, 2023, there will be a suspension on borrowing BUSD in Binance’s Cross Margin trading feature. Consequently, from October 19, 2023, depositing more BUSD as new collateral to Cross Margin Wallets will become impossible. Significantly, from the same September start date, Binance will terminate withdrawals of Binance-Peg BUSD tokens via networks like BNB Chain, Avalanche, and more. Yet, Ethereum network transactions with BUSD in its ERC-20 format will persist until further updates.
More Changes On The Horizon
Additionally, as part of this extensive strategy, Binance is set to phase out BUSD-margined perpetual contracts over time. Users will be informed separately regarding each delisting. Hence, converting BUSD balances in futures wallets to other supported futures margin assets is essential. In another significant move, starting October 13, 2023, Binance’s Simple Earn Flexible Products will not entertain BUSD subscriptions. Additionally, by September 15, 2023, the Auto-Invest feature will no longer back BUSD plans, instead updating them to FDUSD Auto-Invest plans.
Flexible DeFi Staking, meanwhile, will wrap up all current BUSD positions by September 14, 2023. Also, come September 6, 2023, BUSD will no longer be a loanable asset on Binance and VIP Loans. As a final note, Binance Gift Cards will part ways with BUSD by September 30, 2023, with BUSD also bowing out as an order currency within Binance Pay Merchant Service on the same day.
While these changes might seem daunting, Binance assures its users of its steadfast commitment to their best interests.