Coinbase will suspend trading in Binance’s BUSD stablecoin from March 13 because it “does not meet its listing standards.” The move comes after BUSD issuer Paxos vowed to stop creating new tokens due to pressure from regulators.
Coinbase removes BUSD from its ecosystem
On Monday, February 27, US platform Coinbase announced via Twitter that it plans to suspend trading of stablecoin BUSD 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 of the Binance USD (BUSD) on March 13, 2023, at approximately 12:00 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 Binance’s BUSD stablecoin trading on Coinbase will affect its entire ecosystem, namely:
- 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 still have the possibility to withdraw their tokens from the platform.
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 blamed Paxos for the fact that the BUSD is not a registered security, which is considered a “violation of investor protection laws” according to the regulator.
As a result, New York State regulators demanded that Paxos stop issuing new BUSD tokens. Since then, the capitalisation of the Binance stablecoin has been in free fall. While the BUSD had a capitalisation of $16.14 billion on the eve of the Paxos setback, it is now worth around $10.74 billion at the time of writing:
“Nearly 5.5 billion BUSD tokens have disappeared from the market in just 2 weeks” src=”https://www.todayscrypto.news/wp-content/uploads/2023/03/1.chute-capitalisation-busd-binanc.jpg” width=”768″ height=”409″ /☻
In order to comply with regulators’ expectations, it is conceivable that other cryptocurrency trading platforms, especially those based in the US, will remove the BUSD from their markets in the near future.
On the side of Binance, which still heavily uses the BUSD in the majority of its products, the platform is preparing for a transition to other stablecoins. Binance’s CEO Changpeng Zhao said: “
” Binance will be the first to use the BUSD in its products.
Binance expects users to migrate to other stablecoins over time. We will adapt our products accordingly, for example by discontinuing the use of BUSD as the primary pair for trading. “
All eyes are currently on TrueUSD (TUSD), a centralised stablecoin issued by the company TrustToken. Indeed, on-chain data shows that Binance recently mined $130 million of TUSD. As a result, TUSD’s capitalization has surpassed that of FRAX, positioning it as the 5th largest stablecoin in the market.