CZ: BUSD market value will gradually decrease! May no longer use BUSD as the main trading pair

As regulatory news surrounding BUSD intensifies, Binance CEO CZ immediately responded on Twitter, indicating that BUSD may no longer be the primary trading pair on Binance.

For the first paragraph translation, please refer to the original text if in doubt. Background: New York Department of Financial Services requested Paxos to halt issuing BUSD.

#BUSD. A thread. 1/8

In summary, BUSD is issued and redeemed by Paxos. And funds are #SAFU!

— CZ 🔶 Binance (@cz_binance) February 13, 2023

What Did CZ Say?

Overall, BUSD is issued and redeemed by Paxos, and the funds are very safe with SAFU.

We have learned from Paxos that the New York Department of Financial Services (NYDFS) has instructed them to stop minting new BUSD. Paxos is regulated by NYDFS, and BUSD is a stablecoin fully owned and managed by Paxos.

As a result, the market value of BUSD will gradually decrease over time.

Paxos will continue to service this product and manage redemption operations. At the same time, Paxos also assures us that these funds aresafe, fully backed by its bank reserves, which have been audited by multiple auditing firms.

Regarding the lawsuit between the SEC and Paxos, I have no further information beyond what has been publicly reported. The details of the lawsuit are clear between the two parties.

I am not a legal expert in U.S. law, but I agree with Mile's logic. Note: This crypto KOL believes it is unreasonable to consider stablecoins as securities.

If BUSD is deemed a security by the court, it will significantly impact the entire crypto industry and the jurisdiction it operates in.

Binance will continue to support BUSD, and we do not believe users will shift to other stablecoins. We will continue to adjust our products accordingly, such as not using BUSD as a primary trading pair.

Given the ongoing regulatory uncertainties in certain markets, we will review other projects in these jurisdictions to ensure our users are not unduly harmed.

The Collapse of BUSD Empire

According to previous reports, in September of last year, Binance announced that to enhance user liquidity and fund efficiency, Binance would automatically convert existing balances of USDC, USDP, TUSD stablecoins, and new deposits at a 1:1 ratio into BUSD.

Since then, the usage rate and market value of BUSD have been gradually increasing, approaching the market value of the second-largest stablecoin USDC. However, after the blow from NYDFS, the market value of BUSD will cease to grow, and the market value may start to expand compared to the leading stablecoins.

Additionally, Nansen's data also shows that over the past week, Binance has seen an outflow of over $1 billion in stablecoins, with a 5% decrease in the total stablecoin volume on the exchange. BUSD accounts for 22% of Binance's total assets, while USDT holds 24%. If BUSD does not continue as a primary trading pair in the future, USDT trading pairs on Binance may benefit.