• Wed. Jul 17th, 2024

Binance To Stop Supporting BUSD Stablecoin In 2024 Due To Regulatory Issues

Maria Bartiromo

ByMaria Bartiromo

Aug 31, 2023

In a recent report, the Binance exchange announced that it plans to stop supporting its stablecoin, Binance USD (BUSD), by next year due to regulatory issues. At the same time, Binance also revealed a new branch in Poland where it would continue to offer crypto services to Belgian investors.

According to the report, the world’s leading cryptocurrency exchange, Binance, recently announced that it would no longer support its BUSD stablecoin by 2024. Explaining further, Binance cited in the report that the primary reasons for its decision were because of the challenges the firm has recently faced with regulators and because Paxos Trust Company would be taking over BUSD soon.

However, the news of Binance’s decision on BUSD is unsurprising, as many anticipate the action sooner or later. This is because earlier this year, the United States Securities and Exchange Commission planned to file a lawsuit against Pexos Trust Company, charging it for issuing BUSD, which the commission considered an unregistered security.

In February, as a result of the regulatory pressures, Paxos reportedly stopped issuing BUSD stablecoin, which further clouded the future of the token. With a market cap of $3.1 billion, BUSD is currently among the top five rated stablecoins. However, the potential suspension can severely impact the price action of the token and its status in the crypto community.

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BUSD Suspension Puts Stablecoins Future At Risk

In addition, crypto enthusiasts suggested that the new development could make investors and traders who believe in stablecoins panic, seeking haven in other forms of crypto assets, which can trigger massive changes in market values.

Furthermore, the news from the Binance exchange reportedly creates concerns about the general stability and adoption of stablecoins in the global markets, especially with those tokens having regulatory problems. However, the situation can get better or worse, depending on the outcome of the BUSD acquisition by Paxos by February next year, according to spectators.

In addition, the report pointed out that Binance’s plan to bail out on support BUSD marks an event that can have colossal repercussions that won’t affect the stablecoin space alone but the whole crypto industry.

More so, the report stated that as regulators continue to clamp down on the crypto industry, the stability of many crypto assets is put to the test, forcing issuers to implement more robust compliance protocols.  Additionally, the role of Paxos Trust Company in the acquisition of BUSD is very pivotal in defining the future of stablecoin and its influence in the broader crypto ecosystem.

Binance Opens New Branch In Poland To Remain Relevant in Belgium

In other news, the giant crypto firm, Binance,announced that it has opened a new branch in Poland, Polonia sp. z oo. The new office would offer crypto-related services to investors in the country, ensuring the exchange’s continuity in the Belgian market.

Previously, reports revealed that the Financial Services and Markets Authority of Belgium had previously ordered Binance to halt its operation in Belgium, accusing the exchange of breaching its compliance regulation.

There, the new office in Poland would create an avenue for the giant crypto platform to offer its services to Belgian investors and traders, bypassing the ban on the firm in Belgium. However, the approach would only be possible if Belgian users accept the terms of use stated by Binance Poland.

As part of the requirement, users would be asked to provide details to comply with local KYC protocols, according to the report. Binance intends to fully comply with regulators to avoid additional issues with regulators as it currently faces legal challenges from the EU due to the new strict rules the Union recently implemented.

Previously, Binance announced its intentions to comply with the new Markets in Crypto Assets regulations implemented by the EU when it exited the Cyprus market. However, the exchange suddenly withdrew its plans as it backed out of the European Union markets.

Maria Bartiromo

Maria Bartiromo

Maria Bartiromo is a renowned news writer and journalist, celebrated for her insightful reporting and authoritative voice. With a career spanning years, she has established herself as a trusted source of accurate and comprehensive news analysis, keeping readers informed on vital global developments.

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