Based on a recent announcement, certain trading pairs of XRP and Shiba Inu on the largest crypto exchange, Binance, will vanish from the platform in the coming weeks.
In particular, Binance has announced its intention to no longer support its stablecoin, BUSD. This decision implies that Binance will delist BUSD from its platform. By implication, users will be unable to trade XRP or Shiba Inu using BUSD trading pairs.
In the last 24 hours, the XRP and BUSD trading pair saw a trading volume of over $8 million. Similarly, traders on Binance traded nearly $2 billion worth of Shiba Inu within the same period.
Why’s Binance Delisting BUSD?
In a statement early today, Binance communicated that it will gradually wind down its support for Binance USD (BUSD). The decision follows the BUSD issuer’s move to cease BUSD redemption early next year.
As Paxos has halted minting of new BUSD, #Binance will now gradually remove support for the stablecoin on our platform.
BUSD will always remain backed 1:1 by USD, and we continue to support a wide range of other stablecoins.
Find more details below.
— Binance (@binance) August 31, 2023
Specifically, Paxos Trust Co. has suspended the minting of fresh BUSD tokens with redemption ending by February 2024. Following the issuer’s decision to withdraw from the BUSD market, Binance urged its users to abandon BUSD trading pairs. The exchange encouraged its users to convert their BUSD holds to alternative pairs.
Notably, Binance maintained that BUSD will remain pegged to the USD dollars in a one-to-one ratio. Meanwhile, Binance will cease cash out of Binance-Peg BUSD on networks of Avalanche, Tron, BNB Chain, Optimism, and Polygon next week.
Yet, Binance will continue to honor deposits of BUSD from the mentioned networks in the interim. On the other hand, Binance will accept withdrawals and deposits of BUSD via Ethereum’s ERC-20 network. The exchange has not fixed a date to end the support.
In a similar update, Binance said it delisting eight BUSD pairs associated with margin accounts. The to-be-delisted BUSD pairs on Binance Isolated and Cross Margin include REQ/BUSD, FIDA/BUSD, DASH/BUSD, HOT/BUSD, PORTO/BUSD, AMB/BUSD, HARD/BUSD, and NULS/BUSD.
Paxos and BUSD Hurdles
Notably, the sequence of events leading to the decisions impacting BUSD is related to the US regulator. In February, the SEC formally informed the BUSD issuer of an impending lawsuit. The SEC argued that BUSD was an unregistered security.
Since then, BUSD’s position in the market continued to decline. As of February, it was the seventh largest crypto with over $16 billion. Now, BUSD ranks at 23 with only a $3 billion valuation.