Coinbase has moved forward with a planned suspension of Binance USD (BUSD) trading, disabling trading for the stablecoin starting Monday.
“We have disabled trading for Binance USD (BUSD),” the United States-based cryptocurrency exchange said in a tweet dated March 13, adding that users will continue to access their BSD funds and be able to withdraw them at any time. Will be able to.”
exchange at start plans revealed To suspend BUSD trading late last month, citing “listing standards” as the reason behind the decision. The suspension affects Coinbase.com, Coinbase Pro, Coinbase Exchange and Coinbase Prime.
The move comes after the New York Department of Financial Services (DFS) ordered Paxos, a crypto firm that issues Binance’s stablecoin Binance USD (BUSD), to stop mining BUSD tokens. In a consumer alert, DFS said it has issued Order “As a result of a number of unresolved issues related to Paxos’ oversight of its relationship with Binance.”
Later, it was learned that the SEC had issued a Wells notice to Paxos and plan to sue Company upon issuing its BUSD. The agency argued that BUSD is considered an unregistered security.
Following the regulatory clampdown, Paxos announced that it would be “ending its relationship with Binance” and would stop issuing new Business Tokens from February 21. However, the company will continue to support and redeem the tokens until at least February 2024.
The BUSD market cap has been trending downward for the past few weeks as no new tokens are being issued. BUSD’s market cap, which stood at around $16.5 billion at the beginning of the year, has shrunk to around $8.4 billion, according to data from CoinMarkCap.
Meanwhile, in terms of price stability, BUSD has been able to maintain its dollar peg despite recent pressures.
USDC loses peg amid banking crisis in US
Over the weekend, USDC, a regulated stablecoin issued by Circle, broke away from its dollar peg after revealed that the fallen lender Silicon Valley Bank had more than $3 billion in reserves.
The stablecoin fell to an all-time low of around $0.8774 on Saturday amid growing uncertainty. However, it started improving after Circle Mortgage To cover any shortfall in stable currency reserves if it does not receive the entirety of the $3.3 billion held in the SVB.
In addition, US regulators approved a plan to backstop depositors and financial institutions linked to parent company SVB. Depositors at both SVB and Signature Bank, which closed on Sunday over fears of a similar systemic contagion, will have full access to their deposits, as part of a number of steps approved by authorities over the weekend.
As of now, USDC is trading at $0.999, around its intended peg of $1. Notably, the stablecoin has seen massive redemptions over the past few days, with over $3 billion lost in market cap amid the saga surrounding US banks.