Binance will continue to support Binance USD, although the exchange is ready to adjust and potentially move away from using the stablecoin as its main pair for trading.
The comments from Binance CEO Changpeng Zhao come as Paxos, the stablecoin issuer behind BUSD, has been ordered to stop issuing the stablecoin by the New York Department of Financial Services. Zhao — better known by his initials, CZ — said Binance will continue to support BUSD for the "foreseeable future."
"We do foresee users migrating to other stablecoins over time. And we will make product adjustments accordingly. eg, move away from using BUSD as the main pair for trading, etc.," he added. When asked why the exchange wouldn't consider another issuer, Zhao said, "we are exploring others and non-USD-based stablecoins."
The BUSD stablecoin is wholly owned and managed by Paxos. As a result of the NYDFS enforcement action, its market cap will only decrease over time, a Binance spokesperson told The Block." Paxos will continue to service the product, manage redemptions and will follow up with additional information as required."
BUSD accounts for over 37% of spot trading volume on Binance. The share went over 39% in December.
The stablecoin rose in prominence over the past few months as Binance pushed to promote its use on the exchange. Binance offers no-fee trading on BUSD trading pairs, incentivizing traders to trade with it. This was amplified by Binance's decision to convert its users' stablecoin holdings from USDC, USDP, and TUSD into BUSD.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.