Binance recently made a huge announcement on its official website. The world’s biggest exchange has asked users to start converting their BUSD to other stablecoins.
The exchange stated that Paxos would be halting the minting of any new BUSD. Thus, users are encouraged to convert any BUSD before February 2024. Binance has ensured users that every BUSD will be backed 1:1 by US dollars.
This does not mean that Binance will stop its support for digital assets and stablecoins. Users can still access the service, but they must convert any BISD holding into other assets. Binance will be offering zero trading fees if users decide to trade the BUSD holdings for FDUSD.
Converting the BUSD holdings to FDUSD will also be backed at 1:1. The exchange will slowly delist BUSD margin and spot trading pairs. An official announcement regarding this delisting will be shared with users shortly.
According to the latest post by Binance, the exchange will suspend BUSD borrowings on September 7 at 6:00 UTC. Similarly, Portfolio Margin and cross-margin users will also lose access to transferring additional BUSD as collateral to cross-margin wallets. Still, users will be able to transfer other tokens as collateral.
As expected, the news shook the market as traders started to research extensively about the process.
Users learned that Binance-Peg BUSD token withdrawals through Polygon, Avalanche, Optimism, BNB Chain, and Tron will also stop on September 7. The deposit and withdrawal of BUSD tokens through the Ethereum network will still be available till further notification.
Similarly, the deposit of Binance-Peg BUSD tokens through Tron, Optimism, Avalanche, BNB Chain, and Polygon will still be supported. Users can easily convert BUSD to FDUSD at 1:1 manually via Binance Convert.
Users should note that the 1:1 ratio is only available for BUSD to FDUSD and not vice versa. Binance has also listed how other payment methods will be handled after September 7.