Binance will continue to support the USD while exploring non-USD stablecoins this week

Even though its issuer, Paxos Trust Company, is facing a stop order from American regulators, cryptocurrency exchangeBinance intends to continue supporting its Binance USD stablecoin. The New York Department of Financial Services (NYDFS) has ordered blockchain firm Paxos to stop issuing the dollar-pegged stablecoin BUSD.

The United States Securities and Exchange Commission (SEC) has also issued a good notice to Paxos, alleging that BUSD is unregistered security. Despite the planned enforcement action, Binance CEO Changpeng "CZ" Zhao has moved to reassure users that their funds are safe. Zhao stated in a Twitter thread on February 13 that Paxos is regulated by the NYDFS and that BUSD is "wholly owned and managed by Paxos." Paxos will continue to service BUSD and manage redemptions, according to Zhao. It also provided assurances about its reserves, which had been audited by several parties.

The Binance CEO stated that as a result of the enforcement action, the BUSD market cap would decrease over time, and the exchange would investigate non-US dollar-based stablecoins. Zhao also stated that Binance would continue to support the stablecoin on its exchange while acknowledging that the enforcement action may cause users to migrate to other stablecoin tokens. Binance will also consider "product adjustments," such as moving away from using BUSD as its primary trading pair for the numerous tokens available on the exchange. Binance's CEO also warned that the SEC and NYDFS actions could significantly impact the cryptocurrency ecosystem's ongoing development.

Zhao also stated that ongoing regulatory uncertainty in certain markets would necessitate a review of other projects in those jurisdictions "to ensure our users are not harmed in any way." In recent years, American regulators have targeted several cryptocurrency service providers and tokens. Ripple is still fighting the SEC over allegations that XRP is unregistered security. Meanwhile, the cryptocurrency exchange Kraken agreed to discontinue its staking services to US clients in February 2023 in exchange for paying the SEC US$30 million in disgorgement, prejudgment interest, and civil penalties. Kraken was charged by the regulator with failing to register its crypto asset staking-as-a-service program.