Suppose you are still holding BUSD tokens in your crypto portfolio or any currency pairs with BUSD. In that case, you should consider switching to some other stablecoin because Binance has announced that on December 15, the firm will discontinue the support for its BUSD stablecoin.
The news is not a shocking revelation, ever since The United States Securities and Exchange Commission (SEC) sued Paxos for issuing BUSD, alleging that it is an unregistered security.
The SEC sent Paxos a Wells Notice, which is a letter informing the company of potential violations of securities laws. The SEC’s main argument was that BUSD is a security because it meets the Howey Test, which is a test used by courts to determine whether an asset is a security.
Paxos later announced that the New York Department of Financial Services (NYDFS) ordered the company to stop issuing new BUSD tokens, and the firm agreed to halt issuing BUSD.
BUSD currently has a market capitalization of $16 billion, and the move to stop providing the support of the stablecoin came after the recently concluded chapter of Binance’s leadership change. Binance has assured users that BUSD will continue to be redeemable until February 2024.
While Binance is phasing out its BUSD stablecoin, it is replacing it with FDUSD. The exchange will no longer support BUSD after December 15, 2023, and users will be able to convert their BUSD holdings to FDUSD without incurring trading fees until December 31, 2023. After that date, any remaining BUSD holdings will be automatically converted to FDUSD.
FDUSD is a relatively new stablecoin, but it has already gained some traction in the cryptocurrency market. It is listed on several exchanges, including Binance and Huobi Global. FDUSD is also used by some dApps, including decentralized exchanges (DEXs) and lending platforms.
The stablecoin is issued by FD121 Limited, a distinct entity operating under the brand name First Digital Labs located in Hong Kong.
