According to a recent article from Forbes, Binance is looking to move beyond its doomed stablecoin BUSD and explore alternative formats, pegs, and partners. BUSD, which was effectively canceled by U.S. regulators, has prompted multiple public and private entities to express their interest in working with the exchange on similar initiatives, according to Binance’s chief strategy officer, Patrick Hillmann.
Hillmann stated that “there are very interesting opportunities, particularly in Europe and the Middle East,” but did not provide further details. Binance CEO Changpeng Zhao has also indicated that the company is exploring other issuers and non-USD based stablecoins, suggesting that a replacement for BUSD might not be dollar-based.
While this move may prove challenging, as nearly all prominent stablecoins remain pegged to the U.S. dollar, this situation also creates an opportunity for non-USD stablecoins. One of the reasons it has taken so long for non-USD stablecoins to become prevalent is regulations. Stablecoin issuers are looking for ways to get properly regulated without making numerous assumptions and spending large amounts of money on lawyers to provide opinions, according to Kevin Zhang, co-founder of DFX Finance, a decentralized finance protocol for non-U.S. dollar stablecoins.
On Tuesday, the New York Department of Financial Services ordered cryptocurrency firm Paxos to stop creating more BUSD tokens. An NYDFS spokesperson stated that Paxos violated its obligations for “tailored, periodic risk assessments” and due-diligence checks on Binance. A source in the crypto forensics industry suggested that this language indicates a concern with money laundering and/or know-your-customer issues. The DFS declined to provide further comment to Forbes.
In Hillman’s view, BUSD’s days are numbered. He explained, “people aren’t going to be looking to buy more BUSD because they’re not going to be certain how they’re going to reimburse it.” Binance-peg BUSD, a derivative of BUSD created by Binance for blockchains other than Ethereum, is also likely to wind down, according to Hillman. He also confirmed that the exchange does not currently have a U.S. banking partner, which could pose further challenges for Binance in the U.S.
As American regulators clamp down on cryptocurrencies on multiple fronts, Binance appears to be quickly losing footing in the U.S. Last month, the exchange announced that its U.S.-based banking partner, Signature Bank, would no longer process dollar-denominated transactions for individuals of less than $100,000. Hillman stated that they have heard from multiple other banks that have been given a heads up that it might behoove them in the coming days if they are planning to operate out of the U.S. to move away from servicing crypto platforms.
Read more:
- Paxos Burns Over $700 Million Worth Of BUSD Tokens As Regulatory Pressure Mounts
- New York Regulators Crack Down On Crypto: Binance’s BUSD Token Creation Halted
- Paxos, Issuer Of USDP And Binance USD (BUSD) Stablecoins, Under Investigation By NYDFS
- Paxos To Halt Relationship With Binance, Encourages Customers To Convert BUSD Tokens To Pax Dollar (USDP)