Coinbase will halt trading of Binance’s BUSD stablecoin because it “does not meet its listing standards”. A decision that comes after the company Paxos, which issues the BUSD, pledged to stop creating new tokens due to pressure from regulators.
Coinbase removes BUSD from its ecosystem
This Monday, February 27, the American platform Coinbase announced via Twitter that she planned to suspend trading of BUSD stablecoin on all its platforms:
“We regularly monitor assets on our exchange to ensure they meet our listing standards. Based on our most recent reviews, Coinbase will suspend trading in Binance USD (BUSD) on March 13, 2023, around 12 p.m. ET. »
We regularly monitor the assets on our exchange to ensure they meet our listing standards. Based on our most recent reviews, Coinbase will suspend trading for Binance USD (BUSD) on March 13, 2023, on or around 12pm ET.
— Coinbase Assets (@CoinbaseAssets) February 27, 2023
The cessation of trading of Binance’s stablecoin BUSD on Coinbase will affect its entire ecosystem, namely:
- Coinbase.com;
- Coinbase Pro;
- Coinbase Exchange;
- Coinbase Prime.
It should be noted that this is not strictly speaking a delisting of the BUSD. Indeed, Coinbase users who hold BUSD in their wallet will always be able to withdraw their tokens from the platform.
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The end of the BUSD stablecoin is accelerating
On February 12, the Securities and Exchange Commission (SEC) sent a letter to Paxos, in which the regulator notified the company of possible legal proceedings. The SEC therefore criticized Paxos for not being a registered security, which is considered a “violation of investor protection laws” according to the regulator.
Following this, New York state regulators demanded that Paxos stop issuing new BUSD tokens. From, Binance’s stablecoin capitalization plummets. While BUSD had a capitalization of $16.14 billion on the eve of the disappointments of Paxos, it is around 10.74 billion dollars at the time of this writing:
Nearly 5.5 billion BUSD tokens disappeared from the market in just 2 weeks
In order to comply with regulators’ expectations, it is possible that other cryptocurrency exchangesespecially those based in the United States, withdraw BUSD from their markets in the near future.
On the side of Binancewhich still heavily uses BUSD in the majority of its products, the platform is preparing for a transition to other stablecoins. Binance CEO Changpeng Zhao said:
“Binance expects users to migrate to other stablecoins over time. We will adapt our products accordingly, for example by abandoning the use of BUSD as the main pair for trading. »
All eyes are currently on TrueUSD (TUSD), a centralized stablecoin issued by the company TrustToken. Indeed, on-chain data shows that Binance recently minted $130 million worth of TUSD. Consequently, the capitalization of TUSD has exceeded that of FRAX, allowing it to position itself as the 5th stablecoin in the market.
Will TUSD be the worthy successor to BUSD to power the Binance ecosystem?
👉 On the same subject: PayPal suspends its stablecoin project in the face of pressure from regulators
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Source: Coinbase Twitter, CoinMarketCap
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