Paxos has published a media statement to announce that it will soon halt the minting of BUSD. The development comes after the blockchain and tokenization infrastructure platform announced that it would end its relationship with Binance for the issuance of BUSD. This goes into effect on February 21, 2023; however, the reserves will continue to be managed by Paxos Trust.
Tokens in the reserves are backed 1:1 by the US dollar and are stored in bankruptcy remote accounts. Paxos is working in collaboration with the New York Department of Financial Services to cease the issuance of the stablecoin.
Customers can be assured of the safety of their assets, as Paxos will continue to support BUSD while allowing customers to redeem the token by February 2024.
The platform will extend all the facilities to not just existing customers but also new ones. An alternative option is to convert the token to Pax Dollars, also known as USDP. This is, needless to say, in addition to redeeming the funds in US dollars.
There is a question, though, that the community keeps asking, wondering if the update has come as a result of the SEC sending Paxos a notice regarding the issuance of BUSD. The SEC, in the notice, has claimed that BUSD is, in fact, a security that is being offered without registration. A statement from Paxos or Binance has yet to be made public.
It is still safe to assume that both partners, who are now almost at the end of their relationship, are prioritizing customer safety by halting its issuance.
Paxos has echoed the sentiment in the press release by saying that it will continue to maintain a strong regulatory capital to protect customers’ interests. Moreover, it aims to support long-term goals by ensuring the bottom line remains more robust than ever or greener than ever. Paxos seeks to be the leader in this global blockchain tokenization infrastructure segment. Halting the minting process of new BUSD tokens is less likely to come in the way of achieving the goal.
Even with the most recent update, a process to transition to a better financial system will continue to be discussed. Paxos is renowned for its commitment to transparency and regulation. The venture has yet to discuss its future roadmap with the community; only then will it be clear how it plans to achieve its objective.
Paxos’ blockchain solutions are supported by solid cooperation with, among others, Nubank, Bank of America, Mastercard, Interactive Brokers, and PayPal. In other words, even though BUSD token mining has ceased, there is nothing preventing Paxos from progressing in the next few days.
What further strengthens the confidence of the community in Paxos is its $540 million investment round, which saw the participation of investors like Founders Fund and Declaration Partners.