Coinbase to Suspend BUSD Trading on March 13th
Following a relentless regulatory assault on the Binance-branded stablecoin, Coinbase, the largest US-based cryptocurrency exchange, announced it would suspend BUSD trading in mid-March. The Paxos-issued token became the target of both the SEC and the New York Department of Financial Services (NYDFS) earlier in February.
Coinbase to Halt BUSD Trading
Through its Coinbase Assets Twitter account, Coinbase announced on Monday it would suspend BUSD trading on March 13th. According to the exchange’s post, the stablecoin no longer meets its listing standard. The suspension will affect users on Coinbase Pro, Coinbase Exchange, and Coinbase Prime, and both simple and advanced trade.
Binance-branded BUSD, as well as its issuer, found itself under regulatory scrutiny in mid-February when the NYDFS ordered Paxos to stop mining the stablecoin claiming the company was unable to continue doing so “safely”. Around the same time. Paxos revealed it had received a Wells notice from the SEC alleging that BUSD is an unregistered security.
The regulatory actions led to the end of the relationship between Paxos and Binance. Furthermore, the exchange’s CEO Changpeng Zhao already hinted that his company would be moving away from BUSD but stated that the events would have little consequence for his firm as it was not particularly reliant on the stablecoin.
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Coinbase Continues Building Despite Regulatory Pressure
Not unlike many other cryptocurrency businesses, Coinbase found itself under increased pressure throughout 2022, as well as in the first months of 2023. The company’s Q4 earnings report showed a significant drop in its user base and revenue, and the SEC’s recent settlement with Kraken surrounding its staking service caused a great deal of concern with regard to Coinbase’s offering.
Coinbase, has, however, also so far proved its resilience despite the turmoil affecting the crypto industry. Soon after its Q4 report came out, the exchange revealed it had a strong January and is well on track to continue its growth in the first months of 2023. Furthermore, Coinbase also reacted to the enforcement action targeting Kraken by explaining, without ambiguity, that its offering is fully compliant and not in danger of being targeted by the SEC.
The exchange also continued expanding its offering despite the turbulence. On February 21st, it announced it would list the euro-backed stablecoin EUROC and offer EUROC-USD, and EUROC-EUR trading pairs as soon as sufficient supply has been established. A perhaps even more exciting development came on February 23rd when Coinbase revealed it had partnered with Optimism to create Base, an Ethereum L2 platform built for the creation of decentralized apps.
Do you think the recent targeting of BUSD could lead to a permanent move away from USD-backed stablecoins? Let us know in the comments below.