As a consequence of an internal inquiry, Coinbase Global Inc., the biggest cryptocurrency exchange in the United States, recently stated that it will ban trading of Binance's native stablecoin, BUSD. This comes after Paxos, the business that produces BUSD, was recently ordered to stop producing more of Binance's dollar-pegged stablecoin by the New York Department of Financial Services (NYDFS), which recently put severe controls on the company. As a result, Binance is currently confronted with a number of regulatory difficulties in the country.
Coinbase suspends trading in BUSD
Coinbase recently revealed in a tweet that they regularly check the exchange's assets to make sure they meet their listing requirements. The exchange has consequently decided to halt trading in the Binance-issued stablecoin BUSD as a result of this assessment and subsequent reviews.
For all platforms, including Coinbase Pro, Coinbase Exchange, and Coinbase Prime, and for all levels of trading, including simple and advanced, trading will be suspended, according to Coinbase. But, consumers will continue to have access to their funds and be able to withdraw them whenever they want. The suspension will occur on March 13, 2023, at or around 12 o'clock in the afternoon Eastern Time (ET).
The Stablecoin War
The U.S. Securities and Exchange Commission (SEC) issued a Wells Notice against Paxos, alleging that the company's Binance USD (BUSD) is an unregistered security, leading to the New York financial regulator's judgement. A "Wells Notice" is a letter that the SEC sends to people or businesses when it is thinking of suing them.
Many believe that Circle, the company that created the USDC stablecoin, gave the U.S. government the tip. This comes after Binance allegedly stopped supporting USDC and started converting the cryptocurrency into BUSD automatically before the end of 2022. This action has a significant negative impact on the company's once-dominant stablecoin market share. Being one of Circle's original members, Coinbase collaborated with them to create the USDC stablecoin.