Binance to Shut Down BUSD Lending
Binance to Shut Down BUSD Lending Services on October 25
Crypto exchange Binance has announced that it will be discontinuing borrowing and lending services for its native stablecoin, Binance USD (BUSD), on October 25, 2023.
According to an announcement posted on their website, Binance will close all outstanding BUSD loan and collateral positions by the end of the month. However, users will still be able to borrow and lend on Binance using stablecoins such as Tether, Dai, TrueUSD, and USD Coin.
Binance stated that they will cease all services related to BUSD by February 2024.
The decision comes at a time when the cryptocurrency industry is facing increasing regulatory scrutiny. In recent months, Binance has been fined or sanctioned by several regulators, including the UK's Financial Conduct Authority (FCA) and the US Securities and Exchange Commission (SEC).
The shutdown of BUSD lending services is likely to have a limited impact on the overall cryptocurrency market. BUSD is the fourth-largest stablecoin by market capitalization, but it accounts for less than 2% of the total stablecoin market.
BUSD reached a peak market capitalization of $23 billion in November 2022. It has since fallen to $2.23 billion at the time of writing.
On February 13, the issuer of the BUSD stablecoin, New York fintech firm Paxos, said it would end relations with Binance due to the latter's ongoing litigation with the U.S. Securities and Exchange Commission.
The impact on users
Users who currently have outstanding BUSD loans or collateral positions will need to close them out by October 25, 2023. Otherwise, their loans will be liquidated and their collateral will be seized.
Users who are holding BUSD in their Binance accounts will still be able to trade, deposit, and withdraw it before the stablecoin is officially terminated. However, they will no longer be able to earn interest on their BUSD holdings by lending it out.
About the Author
Crypto Enthusiast for over 6 years now. Working full time in DeFi since 2021.