- Crypto exchange Coinbase will stop supporting trading of the BUSD stablecoin on March 13.
- Paxos ended its commercial relationship with Binance due to regulatory pressures.
- Binance’s BUSD stablecoin continues to lose investors as predicted by its CEO.
Coinbase Drops Support for BUSD
Coinbase, North America’s largest crypto exchange, said in a tweet that it regularly monitors assets, “to ensure they meet our listing standards.” Based on that due diligence, the platform sees no commercial gain in continuing its use of BUSD. Customers of Coinbase.com, Coinbase Pro, Coinbase Exchange, and Coinbase Prime will no longer be able to trade BUSD come noon on March 13, but they will be able to withdraw their funds.
Two weeks ago, Paxos said it would “end its relationship with Binance” due to regulatory action from New York Department of Financial Services. Paxos is also reportedly under fire from the Securities and Exchange Commission (SEC). The SEC allegedly plans to sue Paxos for violating investor protection laws.
Binance previously provided details about the commercial arrangement between the two parties. The crypto exchange allowed Paxos to mint new BUSD on the Ethereum blockchain and provided licensing support. The arrangement was “approved by the New York Department of Financial Services,” according to Paxos, but the NYDFS changed course due to “several unresolved” oversight issues.
Binance Abandoning BUSD To Favor TrueUSD Stablecoin?
The regulatory scrutiny and the Coinbase delisting are indicators of a peak in the BUSD stablecoin’s influence over the crypto market. Binance CEO, Changpeng Zhao, said at the time of the Paxos announcement that his exchange foresees “users migrating to other stablecoins over time. And we will make product adjustments accordingly. eg, move away from using BUSD as the main pair for trading.”
The exchange is already shifting much of its trading to the TrueUSD stablecoin, which this week became the fifth-largest stablecoin. Crypto intelligence firm Nansen said that Binance had minted $130 million worth of TUSD in the past seven days. BUSD still claims the number three spot but has seen its market cap slashed to $10.7 billion from $22 billion in December.