Users can still borrow and lend using other stablecoins
Crypto exchange Binance has announced that it will be discontinuing borrowing and lending services for its native stablecoin, Binance USD (BUSD), by October 25. This decision comes as part of the exchange's plan to 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 other stablecoins such as Tether, Dai, TrueUSD, and USD Coin.
Phase-out process
This move follows Binance's previous announcement on August 31 stating that it will terminate all services related to BUSD by 2024. The New York fintech firm Paxos, which issues the BUSD stablecoin, had already decided to end its relations with Binance in February due to the ongoing litigation with the U.S. Securities and Exchange Commission. While redemptions from BUSD to underlying U.S. cash and Treasuries will cease in February 2024, minting of new BUSD tokens has already been halted.
Market impact
Once one of the largest stablecoins, BUSD reached a peak market capitalization of $23 billion in November 2022. However, its market cap has since fallen to $2.23 billion at the time of publication. The termination of BUSD and its related services has been carried out in phases, with previous suspensions of BUSD withdrawals via several blockchains. BUSD deposits, however, remain open across all blockchains for now.
Next steps for users
Binance is advising users to convert their BUSD balances into fiat or other cryptocurrencies by next year. While users will no longer be able to borrow and lend using BUSD, they still have the option to utilize other stablecoins available on the platform.
