In response to regulatory concerns surrounding stablecoin issuer Paxos, cryptocurrency exchange Coinbase recently announced that it would cease trading in Binance USD (BUSD) as of March 13.
Coinbase announced that trade in binance USD (BUSD) would terminate on February 27, 2023. The choice was made after regulatory agencies, specifically the New York State Department of Financial Services (NYDFS), on February 13 placed regulations on stablecoins.
Several reports claim that the U.S. That same day, Paxos received a Wells Notice of BUSD from the Securities and Exchange Commission (SEC).In a press release, Paxos acknowledged that the regulated business had received a directive from the NYDFS to halt creating new stablecoins.
"We continuously check that the assets listed on our exchange adhere to our listing guidelines. On March 13, 2023, at or around 12 p.m. ET, Coinbase will stop trading Binance USD (BUSD) based on our most recent evaluations" . -Coinbase said in its announcement.
With the publication of the regulations, BUSD was in jeopardy. The Paxos Treasury, 140,000,000 BUSD were just torched. Despite Paxos' commitment to upholding escrow and turning BUSD into cash, the stablecoin's market share is dwindling. Due to the inability to manufacture new coins and the ongoing burning of Paxos coins, there are currently only 10.98 billion tokens in circulation for this stablecoin, a decrease of roughly 31% over the past 30 days.
The governance page stated on February 27 that the "freeze" BUSD on Aave V2′′ decision by the Aave community was "agreed upon unanimously on February 26 and took effect the next day.
This stablecoin is losing market share despite Paxos' efforts to maintain the margin and convert BUSD to cash.