SAFAKNA TURKEY – According to information compiled by Borsa Gundem, it appears that the latest rally has slowed down in a market that has been showing signs of recovery since the start of the year. Along with Bitcoin showing bearish signs, Binance native BUSD seems to be in trouble.
The value of BUSD will decrease over time
As reported by Bloomberg’s Emily Nicole, Binance, the world’s largest cryptocurrency exchange, reports that it has learned that its stablecoin partner is preparing to stop issuing BUSD. Binance said in a statement that Paxos Trust Co. instructed to stop issuing Binance’s native token, BUSD, which is known as the third largest stablecoin.
“Paxos has informed us that the New York State Department of Financial Services has been instructed to stop issuing new BUSD,” a Binance spokesperson said in a statement released today. “BUSD is a stablecoin wholly owned and operated by Paxos. As a result of this event, the market value of BUSD is expected to decline over time.”
The statement said that Paxos will continue to service the product and manage payments, and will monitor the process if necessary, providing additional information. “Paxos also ensures that the funds are safe and fully backed by reserves in their banks,” the statement said. Paxos is reportedly refraining from responding to requests for comment.
Market capitalization $16 billion.
BUSD has a market capitalization of $16 billion and serves as a key cog in both the Binance ecosystem of billionaire “CZ” Changpeng Zhao and the wider crypto industry. The event is believed to highlight the mounting pressure on the US digital asset industry following the massive $2 trillion crash and bankruptcy of the FTX exchange.
It is noted that Binance Coin (BUSD), the local token of the Binance exchange, fell by 5.5% after this news. On the other hand, the wider crypto markets are more stable. It seems that Bitcoin lost only about 0.8 percent.
Also known as stablecoins, “stablecoins” are designed to hold a certain amount of value. Stablecoins are earned in various forms, and some are backed by reserves such as cash and bonds. Investors often choose to hold their investments in stablecoins when trading cryptocurrencies.
Paxos is overseen by the New York State Department of Financial Services and says Binance’s USD reserves are held in cash and in the treasury. The market value of Pax Dollar, known as Paxos’ native stablecoin, is $899 million.
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