Paxos Terminates New BUSD Minting
In a significant move shaking the crypto world, Paxos Trust Company has announced it will cease the issuance of new Binance USD (BUSD) stablecoins starting February 21. The decision comes amidst an ongoing investigation by New York regulators that has everyone re-evaluating their wallets and possible lunch orders on the blockchain front.
Details of the Announcement
Paxos officially declared on February 13 that it would end its partnership with Binance concerning the U.S. dollar-pegged stablecoin BUSD. The New York Department of Financial Services (NYDFS) played a substantial role in this orchestration, signaling a new direction for Paxos and BUSD.
What About Existing Tokens?
Hold your horses (and your BUSD)! Paxos did assure users that all existing BUSD tokens would remain fully backed and redeemable via Paxos Trust until at least February 2024. This means your previous investments aren’t disappearing into the blockchain void—they’re safe and sound. Customers will also have the option to swap BUSD for another Paxos-issued stablecoin, Pax Dollar (USDP). No worries, right?
Paxos’s Broader Regulatory Commitments
Paxos didn’t just throw in the towel and call it a day; the firm proudly clarified that they remain a regulated institution under the watchful eye of the NYDFS and are audited by a top accounting firm. Talk about transparency! They also reassured stakeholders about their continued operations involving both USDP and the gold-backed Pax Gold (PAXG). We certainly hope their coffee supplier is regulated too!
Binance Reacts: A Tweet of Assurance
Binance’s CEO, Changpeng Zhao, a.k.a. CZ, quickly took to Twitter to clear the waters, stating that the exchange was informed by Paxos about the cessation of new BUSD issuance. Essentially, this tweet was like waving a white flag of clarity, informing users that it’s all Paxos calling the shots here, and Binance is simply a confused bystander asking for directions.
Market Implications
As per Zhao, the limit on BUSD issuance means the market capitalization of BUSD will continue to shrink—like a wool sweater that’s forgotten in the dryer too long. With its current market cap pegged at around $16 billion, BUSD has placed itself as the seventh largest cryptocurrency. Yet, at the time of writing, the stablecoin is slightly drifting from its dollar peg, trading at approximately $0.998. Ah, the joys of stablecoin volatility, right?
The Dawn of Regulatory Scrutiny
The halt follows the NYDFS’s abrupt command to Paxos on February 13. Just before that, the U.S. Securities and Exchange Commission had issued a notice to Paxos, alleging that BUSD could be an unregistered security. So, while the bubble might not have burst completely, it sure seems like someone’s stepping on it a bit!
+ There are no comments
Add yours