Coinbase Will Pause BUSD Trading On March 13 Amid Regulatory Suppression

Key Points:

• Cryptocurrency exchange Coinbase has announced it will suspend trading and delist the stablecoin asset BUSD managed by Paxos.
• BUSD transactions will pause around midnight EST on March 13, 2023.
• BUSD has a lot of trouble with the heavy regulatory framework on stablecoins.

According to a recent announcement by cryptocurrency exchange Coinbase, it will suspend Binance USD (BUSD) trading as of March 13 amid regulatory issues surrounding stablecoin issuer Paxos.

On February 27, 2023, Coinbase announced they would suspend binance USD (BUSD) trading. The decision comes after regulatory authorities recently imposed regulation on stablecoins, specifically the New York State Department of Financial Services (NYDFS), on February 13.

Reports indicate that the U.S. Securities and Exchange Commission (SEC) sent Paxos a Wells Notice of BUSD that day. Paxos confirmed in a press release that the NYDFS had directed the regulated company to stop issuing new stablecoins.

“We regularly monitor the assets on our exchange to ensure they meet our listing standards. Based on our most recent reviews, Coinbase will suspend trading for Binance USD (BUSD) on March 13, 2023, on or around 12 pm ET.”

Coinbase said in its announcement

BUSD was in trouble after the regulations were announced. Recently, 140,000,000 BUSD was burned at Paxos Treasury. Although Paxos is committed to maintaining escrow and converting BUSD to cash, the stablecoin’s share is declining. The current supply of this stablecoin is only about 10.98 billion tokens, down by almost 31% over the past 30 days due to the inability to produce new coins and the constant burning of Paxos coins.

The governance page on February 27 commented that the Aave community’s “freeze” BUSD on Aave V2″ was “approved by a unanimous vote on February 26 and went into effect the following day.

Despite Paxos’ efforts to keep the margin and convert BUSD to cash, this stablecoin is losing ground in the market.

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