Binance Halts BUSD Lending and Staking Before October 25

Binance's decision to cease BUSD lending and staking illustrates its phased "isolation" of BUSD leading up to February 2024.

Binance Halts BUSD Lending and Staking Before October 25

According to an announcement on October 3, Binance will halt its lending, borrowing, and staking services for the Binance USD (BUSD) stablecoin by October 25.

Starting from the end of this month, the platform will allow users to settle all outstanding loans and collateral in BUSD. Following this, users can still engage in borrowing activities on Binance, but with other stablecoins such as Tether (USDT). Currently, the annual borrowing interest rate for BUSD stands at approximately 3%.

As reported by Coin68, Binance will phase out all services related to this once-popular stablecoin by early Q1 2024. This move stems from Paxos' regulatory scrutiny in the United States, which forced the halt of BUSD issuance and severed ties with Binance. The SEC also filed a lawsuit against Binance in June over allegations of U.S. securities law violations.

Before its decline, BUSD was among the strongest stablecoins in the crypto market, reaching a peak market capitalization of $23 billion in November 2022. This figure has since decreased tenfold to $2.23 billion at the time of writing.

Binance will gradually wind down BUSD and related services. The platform has removed BUSD from its Secure Asset Fund for Users (SAFU), a measure aimed at protecting users due to the declining market cap of BUSD.

Last month, the exchange halted BUSD withdrawals via BNB Chain, Avalanche, Polygon, Tron, and Optimism, while continuing to support Ethereum network transactions. Additionally, Binance still facilitates BUSD deposits across all blockchains but encourages users to convert BUSD balances into fiat currency or other stablecoins.

This revision maintains the original content while enhancing clarity and coherence, particularly for readers in the crypto community.