- Paxos terminates collaboration with Binance on BUSD, citing coordination with NYDFS. Paxos Trust to manage BUSD reserves while ensuring 1:1 backing with USD.
- BUSD, a 1:1 USD-backed stablecoin regulated by NYDFS, guarantees customer protection and availability for 1:1 redemption, despite recent developments.
- Binance takes proactive measures for BUSD transition. Users advised to convert assets to alternative stablecoins for a seamless trading experience during the change.
In an unforeseen twist of events, following Paxo’s decision, Binance has decided to halt support for the BUSD token. Let’s dive into the details.
Paxos’ Decision to Halt BUSD Mining
Paxos is a leading regulated blockchain and tokenization infrastructure platform. In February 2023, the platform announced that it was ending its collaboration with Binance for the branded stablecoin BUSD. According to the media release, Paxos took this decision in coordination with the New York Department of Financial Services (NYDFS).
However, the release made it clear that the Paxos Trust, which is a regulated institution overseen by NYDFS, will continue managing BUSD dollar reserves. The firm assured users that Paxos Trust will continue reserving BUSD in bankruptcy remote accounts that are fully segregated. Moreover, the token has always been backed by 1:1 US dollars and shall continue to do so.
BUSD is a stablecoin that is 1:1 USD-backed and has been approved by NYDFS. It was initially issued in partnership with Paxos. BUSD is fully regulated by NYDFS and offers high-end customer protection. All reserves were held 100% in cash and cash equivalents by Binance, and hence, customer funds were said to be always available for 1:1 redemption.
However, certain things have changed from its initial point. Although it continues to be backed as a stablecoin, Binance has released its own update regarding BUSD now.
With growing collaborations of Binance, the platform has taken a proactive approach in response to Paxo’s decision. The platform has formulated a comprehensive transition plan to ensure a smooth transition for users as it ceases support for BUSD products.
The platform has encouraged users to convert their BUSD assets into other available assets. Through this conversion, users can maintain a seamless trading experience and access alternative stablecoins.
With Binance’s commitment to ensure a seamless transition, users can expect a thorough response from their team. The value of the BUSD token, however, remains stable for now.