Coinbase Stop Trading BUSD Stablecoins

BUSD is no longer traded on Coinbase. (Photo; Doc. Cryptomnaies)

JAKARTA - Cryptocurrency trading continues to show highly volatile dynamics, even against stable cryptocurrencies such as BUSD. The largest cryptocurrency trading company in the United States, Coinbase, recently announced the suspension of BUSD trading on its platform.

This decision had a major impact on the market, with a spike in withdrawals in Binance as traders rushed to convert their BUSD assets to dollars. In addition, Binance founder Changpeng Zhao has stated that the exchange will switch from BUSD as its main trading partner.

Coinbase has announced the suspension of BUSD trading on its platform. This decision was taken after an internal review of the asset and announced by the company's CEO, Brian Armstrong. Coinbase claims that BUSD no longer meets its recording standards, according to a CoinSpeller report.

This decision has raised concerns among crypto traders. There was a spike in withdrawals in Binance, one of the largest exchanges in the world, following the announcement. Traders rushed to convert their BUSD assets to dollars. Data from Nansen shows a net outflow of around $788.5 million from Binance within 24 hours of the announcement.

However, Coinbase notes that users can still withdraw the existing BUSD assets at any time they want. Paxos, the company that scored BUSD, also assured all its customers that its assets are safe and protected. Paxos will continue to process asset redeemation until February 2024.

Coinbase's decision also had an impact on Binance. Binance relies on BUSD to maintain liquidity on its platform, especially in jurisdictions like the US. Recently, Binance has prioritized the use of BUSD rather than other stablecoins, with most of its trading pairs denominated by BUSD. Now, with the end of Paxos' partnership with Binance, US Binance subscribers will find it harder to access the exchange.

According to Binance CEO Changpeng Zhao, Binance will switch from BUSD as its main trading partner. CZ also noted that the exchange will continue to support BUSD in the near future. However, Binance will review its projects in jurisdictions such as the US that face regulatory uncertainty to ensure users are protected from improper harm.