Binance Announces End of BUSD Support Amid Regulatory Pressures

Binance Announces End of BUSD Support Amid Regulatory Pressures

Introduction

On September 1, 2025, Binance, the world’s largest cryptocurrency exchange by trading volume, officially announced that it would gradually discontinue support for its stablecoin Binance USD (BUSD). This strategic decision follows months of regulatory scrutiny, particularly from U.S. authorities, and marks a significant shift in Binance’s approach to stablecoin offerings.

Background on BUSD

Binance USD was launched in 2019 in partnership with Paxos Trust Company, a regulated financial institution in New York. BUSD was designed to be a 1:1 USD-backed stablecoin, regulated by the New York State Department of Financial Services (NYDFS). It quickly became one of the top stablecoins by market capitalization.

However, in early 2023, Paxos was ordered by NYDFS to cease issuing BUSD. This marked the beginning of BUSD’s phase-out.

Official Announcement

In the September 1, 2025 statement, Binance confirmed that it would:

• Cease support for BUSD by February 2024
• Encourage users to convert BUSD into other stablecoins, such as FDUSD
• Begin delisting BUSD trading pairs over time

The announcement emphasized Binance’s commitment to “prioritizing user experience and compliance” in light of evolving global regulations.

Source (Primary):

• Binance Blog: Binance’s official statement

Regulatory Context

This decision follows a February 2025 enforcement action by the U.S. Securities and Exchange Commission (SEC), which reportedly considered BUSD an unregistered security. Paxos, the BUSD issuer, halted new issuance shortly after.

According to Bloomberg, the SEC’s move was part of a broader regulatory crackdown on crypto-related products perceived to pose risks to investors or circumvent securities laws.

Secondary Sources:

• Bloomberg: “Paxos to Stop Issuing Binance’s BUSD After SEC Warning”
• Reuters: “Paxos halts issuance of Binance USD as regulators circle”

Market Impact

The phasing out of BUSD is expected to impact users who rely on the stablecoin for trading and DeFi applications. Binance has already begun promoting First Digital USD (FDUSD), a relatively new stablecoin, as an alternative.

Analysts note this transition may affect BUSD’s market share and could drive volume toward other stablecoins like USDT and USDC.

Conclusion

Binance’s decision to discontinue BUSD is a notable response to increased regulatory pressure in the crypto space. While the exchange remains a dominant player, its shift away from BUSD signals a move toward more compliant, possibly decentralized alternatives.

The crypto industry continues to adapt, and Binance’s pivot underscores the evolving relationship between digital assets and global financial regulators.