- Binance is carrying out a phased termination of BUSD-related services.
- BUSD withdrawals via various blockchain networks were suspended last month.
- Binance is currently locked in a legal battle with the US Securities and Exchange Commission (SEC).
In a significant development within the cryptocurrency exchange sphere, Binance has officially announced the discontinuation of borrowing and lending services for its native stablecoin, Binance USD (BUSD).
The move is part of a phased termination of BUSD-related services, culminating in a complete cessation expected by February 2024.
Shutting down BUSD lending
As per the announcement made on October 3, 2023, Binance is set to shut down BUSD borrowing and lending services by October 25, 2023. The exchange will close all outstanding BUSD loan and collateral positions by the end of the month.
Users who have been utilizing BUSD for lending purposes will now have to explore alternative stablecoins, such as Tether (USDT), Dai, TrueUSD (TUSD), and USD Coin (USDC), for their lending needs on the platform.
Previously, users enjoyed an estimated annual percentage yield of 3% when lending their BUSD on Binance. However, with this move, BUSD’s role within the Binance ecosystem is set to diminish significantly.
Phased termination of BUSD-related services
Today’s announcement follows Binance’s phased approach to discontinue BUSD-related services.
In the previous month, BUSD withdrawals via various blockchain networks, including BNB Chain, Avalanche, Polygon, Tron, and Optimism, were suspended. Notably, BUSD withdrawals remained available on the Ethereum network.
Although BUSD deposits were maintained across all blockchains, users are encouraged to transition their BUSD holdings into fiat or other cryptocurrencies before the looming 2024 deadline.
This decision to pause BUSD-related services is intertwined with Binance’s ongoing legal disputes with the US Securities and Exchange Commission (SEC).
In February 2023, Paxos, the issuer of the BUSD stablecoin, severed ties with Binance due to the legal uncertainties surrounding the cryptocurrency exchange. Paxos also declared its intention to halt redemptions from BUSD to underlying US cash and Treasuries in February 2024, temporarily pausing the minting of new BUSD tokens.