Binance Pushes Users to FDUSD as It 'Gradually' Phases Out BUSD

As of August 2024, Binance advised its customers to convert their holdings to First Digital USD (FDSR) as it plans to phase out support for BUSD by February 31.

The exchange has announced its intention to “phasing out” support for certain BUSD products, including: delisting of spot and margin trading pairs; removing it as a lending asset on their platform too. Binance assures its users that BUSD is backed by the US Dollar until it ceases to exist.

Binance decided to explain its decision with regulatory issues related to the stablecoin. This year, Paxos, the issuer of BUSD, announced that it will only suspend the issuance of stablecoins after a thorough review by US regulators. At this point, it became known that a cryptocurrency company received a notification from the US Securities and Exchange Commission (SEC), which classified the stablecoin as a security.

After Binance and Paxos accepted the denial of this classification, the crypto community immediately left the stablecoin. At its peak, its offer was around $20 billion at the end of the previous year to $3 billion on the eve of the current period.

Be that as it may, Binance has begun to promote FDUSED as a viable alternative to BCAD for its users. FDUSED is a stablecoin issued by the Hong Kong company First Digital Group on July 26.

According to a post on X's official handle, First Digital reported that the stablecoin's market capitalization reached $300 million within the first month of its launch, and it's not only integrated with the exchange's individual products, but is also a peer-to-peer system. Also, Binance has introduced zero trading fees for some of its pairs.

Despite this, the Binance-backed stablecoin has yet to gain traction in the community. Since it is only available on less than five crypto exchanges.

Moreover, according to CoinMarketCap, FDUSED trading volume is less than $100 million in 24 hours.