Binance, one of the largest global crypto exchanges, is inching closer to discontinuing its BUSD stablecoin.
This follows the recent completion of the conversion of BUSD token balances to FDUSD for eligible users, marking a pivotal shift in the exchange’s stablecoin strategy.
Binance Converts BUSD to FDUSD
Binance announced that users can now confirm the receipt of FDUSD tokens by checking their Distribution or Conversion History pages.
Notably, all eligible BUSD balances in users’ Spot and Funding Wallets underwent conversion to FDUSD at a 1:1 rate. The FDUSD tokens, encompassing ERC20, BEP20, and opBNB smart contract addresses, represent Binance’s latest foray into stablecoin offerings.
Despite these changes, deposits for BUSD tokens have resumed, providing users with continued flexibility. These deposits will be converted to FDUSD at a 1:1 ratio for eligible users on weekdays, with the possibility of pauses without prior notice. Additionally, users can manually swap BUSD for FDUSD using Binance Convert.
However, it’s important to note that withdrawals for BUSD tokens are no longer supported.
The screenshot below shows that FDUSD has a market share of just 1.39%, whereas BUSD still has a market share of 0.75%. Tether’s USDT remains a dominating player, with a market share of over 70%.
Read more: What Is a Stablecoin? A Beginner’s Guide
Stablecoin Dominance. Source: DefiLlama
Why Binance Ditch Its Stablecoin
This move comes after Binance announced in August 2023 its plan to gradually phase out BUSD, following a directive from the New York Department of Financial Services (NYDFS) to Paxos, the issuer of BUSD, to cease minting the coin in February 2023.
At the time. Binance also faced a lawsuit from the Commodity Futures Trading Commission (CFTC) for allegedly offering unregistered crypto derivative products in the US and violating federal laws. The exchange’s new CEO, Richard Teng, succeeding founder Changpeng Zhao, has expressed commitment to regulatory compliance, especially in the US market.
Read more: Binance Review 2024: Is It the Right Crypto Exchange for You?
In light of these developments, Binance has set deadlines for discontinuing BUSD support. The exchange ended support for BUSD on December 15, 2023, with users able to redeem their BUSD until February 2024.
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