Binance Ends BUSD Support: A Shift to FDUSD
Binance, a leading centralized cryptocurrency exchange globally, has recommended its users to convert their holdings in the Binance USD stablecoin (BUSD) to other available assets, including a newly introduced stablecoin. This move is part of Binance’s strategy to gradually phase out support for BUSD.
Binance officially confirmed the earlier speculations about discontinuing BUSD support by February 2024, aligning with Paxos’ plan to cease BUSD redemption at that time.
This announcement followed numerous user reports sharing screenshots of an app pop-up detailing the impending support suspension.
In a blog post on August 31, Binance disclosed that Binance Margin would cease isolated margin borrowing for specific trading pairs by early September. These pairs would then be removed from both isolated and cross margin markets on September 7 at 06:00 (UTC).
Binance outlined its plan to close users’ positions, perform automatic settlements, and cancel pending orders for these pairs by September 9. To minimize potential losses, users were advised to close positions and transfer assets from margin wallets to spot wallets during the delisting process.
Despite simultaneously delisting eight BUSD pairs, Binance did not provide a specific rationale for this decision. The exchange encouraged users to trade or convert their BUSD holdings to First Digital USD (FDUSD), a stablecoin introduced by Hong Kong-based trust company First Digital Group in June, which recently made its debut listing on Binance.
The announcement stated, “Users may trade their BUSD balances for FDUSD at zero trading fees or convert their BUSD balances to FDUSD at 1:1.”
BUSD’s market capitalization has significantly declined under regulatory pressures. From February 9 to the present, BUSD’s market cap has dropped by over 80%, falling from $16.13 billion to $3.1 billion.
In contrast, Tether (USDT), the market’s largest stablecoin, reached a new record high market capitalization exceeding $83.2 billion. This achievement helped Tether recover the $20 billion in market value it had lost following the collapse of rival stablecoin TerraUSD the previous year.
