• Coinbase delisted BUSD, which is a major blow to Binance in the ‘Stablecoin Wars’.
• The delisting was spurred by a complaint from Circle alleging that Binance did not have enough reserves to cover the stablecoin.
• New York regulators ordered Paxos, the issuer of BUSD, to redeem all tokens and stop issuing it.
Coinbase Delists BUSD
Coinbase has become the first major exchange to drop BUSD, dealing a significant blow to rival exchange Binance in the ‚Stablecoin Wars‘. The US-based exchange suspended trading for the stablecoin on March 13, 2023.
The delisting was prompted by a complaint issued by Coinbase’s partner Circle against Paxos and Binance. Circle alleged that there were not enough reserves to cover all the circulating BUSD tokens. This came as both exchanges fought for dominance over the lucrative market of stablecoins.
New York Regulators‘ Order
In response to Circle’s complaint, New York regulators ordered Paxos – the issuer of BUSD – to stop issuing and instead redeem all tokens until its market cap reached zero. As a result, users are no longer able to trade or withdraw their funds in this currency on Coinbase’s platform.
In light of this development, Binance sought distance itself from Paxos and its token by downplaying its involvement with it. It also became clear that despite their efforts 90% of all issued bUSD are still held on their platform.
Stablecoin wars are heating up as major players fight for control over this lucrative market segmented. Coinbase’s decision dealt another blow to Binancen-linked bUSD and sparked further scrutiny into its ties with Paxos and other issuers of stablecoins going forward.