The world of cryptocurrency is constantly evolving, and few changes have been as impactful as the phase-out of Binance’s native stablecoin, BUSD. Once a top-tier digital dollar, BUSD played a crucial role in the crypto ecosystem—especially for traders seeking stability amid market volatility. However, regulatory pressures and strategic shifts have led to its retirement. In this comprehensive guide, we’ll explore what BUSD was, why it’s being phased out, how it compared to other major stablecoins like USDT and USDC, and what users should do now.
What Is BUSD?
BUSD, short for Binance USD, was a stablecoin launched in 2019 through a partnership between Binance and Paxos Trust Company. As a stablecoin, each BUSD token was pegged 1:1 to the U.S. dollar, offering price stability unlike volatile assets such as Bitcoin or Ethereum.
A stablecoin is a type of cryptocurrency designed to maintain a stable value by being backed by reserves—typically fiat currency or short-term government securities.
At its peak, BUSD ranked as the third-largest stablecoin by market capitalization, following Tether (USDT) and USD Coin (USDC), and held a top-10 position among all cryptocurrencies. Its rapid rise was largely attributed to Binance’s global dominance in the crypto exchange space and the trust users placed in its ecosystem.
👉 Discover how stablecoins are reshaping digital finance today.
The End of BUSD: Why Binance Discontinued Support
Despite its early success, BUSD’s journey came to an end due to increasing regulatory scrutiny from U.S. authorities. In February 2023, Paxos, the issuer of BUSD, was ordered by the New York State Department of Financial Services (NYSDFS) to stop minting new tokens.
By November 2023, Binance announced it would cease all support for BUSD-related products effective December 15, 2023. While existing BUSD tokens remain redeemable at face value (1 BUSD = 1 USD), no new issuance occurs.
For most users outside France, Binance automatically converted their BUSD holdings into FDUSD (Binance’s new native stablecoin). French users were given the option to manually swap their BUSD for alternatives like USDC or USDT.
This marks a significant shift in Binance’s strategy—moving away from third-party regulated assets toward more self-controlled solutions in response to compliance challenges.
How Did BUSD Work?
Unlike decentralized cryptocurrencies such as Bitcoin or Ethereum, BUSD operated under a centralized, regulated framework. Each token was fully backed by real U.S. dollars or equivalent cash equivalents held in reserve by Paxos.
Every BUSD in circulation had a corresponding dollar in reserve—ensuring full collateralization and price stability.
These reserves were stored in U.S.-based financial institutions and regularly audited by Withum, an independent accounting firm. Monthly attestation reports were published on Paxos’ official website, promoting transparency and accountability.
Regulatory Oversight
One of BUSD’s defining features was its strict regulatory oversight:
- Supervised by the New York State Department of Financial Services (NYSDFS)
- Issued by Paxos Trust Company, a chartered trust company regulated under New York law
- Regular third-party audits ensured reserve integrity
This level of compliance made BUSD one of the most transparent and trustworthy stablecoins during its active years—particularly appealing to risk-averse investors and institutional players.
Where Could You Use BUSD?
While active, BUSD was widely used across various platforms:
- Trading on Binance: Traders often used BUSD as a stable trading pair with minimal fees.
- Payments: Accepted by select services like BitTorrent and even Air Baltic Airlines.
- Cross-border transfers: Offered fast, low-cost international remittances compared to traditional banking systems.
- Yield generation: Used in decentralized finance (DeFi) protocols for staking and lending.
Users could purchase BUSD directly on Binance or other exchanges like Hotbit and CoinTiger. It also supported conversions to fiat currencies when needed.
However, since Binance has discontinued support, these use cases are now obsolete. Users are encouraged to migrate to alternative stablecoins.
BUSD vs USDT vs USDC: A Comparative Overview
To understand where BUSD stood in the stablecoin landscape, let’s compare it with the two leading alternatives: USDT and USDC.
BUSD vs USDT
| Feature | BUSD | USDT |
|---|---|---|
| Issuer | Paxos & Binance | Tether Ltd |
| Regulation | Highly regulated (NYSDFS) | Less transparent; faced past controversies |
| Reserves | Fully backed; monthly audits | Mixed backing; less frequent disclosures |
| Market Adoption | Lower than USDT | Highest liquidity and usage |
While USDT dominates in trading volume and adoption, it has faced criticism over reserve transparency. In contrast, BUSD was considered more secure due to rigorous audits, though less widely accepted.
BUSD vs USDC
| Feature | BUSD | USDC |
|---|---|---|
| Issuer | Paxos & Binance | Circle & Coinbase |
| Regulation | NYSDFS-regulated | Also regulated; strong compliance |
| Transparency | Monthly attestations | Weekly attestations; higher frequency |
| Availability | Primarily on Binance | Broad DeFi and exchange support |
Both BUSD and USDC prioritized transparency and regulatory compliance. However, USDC edges ahead with broader adoption, especially in DeFi ecosystems and payment networks.
👉 Learn how top stablecoins power modern crypto transactions.
Why Was BUSD So Secure?
BUSD stood out due to its:
- Geographic consistency: Reserves held in U.S. banks; issuer based in New York
- Frequent audits: Monthly attestations by Withum
- Regulatory alignment: Compliance with NYSDFS standards
- Full dollar backing: No algorithmic mechanisms involved
This centralized model may seem contrary to crypto’s decentralized ethos, but it provided a high degree of safety—ideal for conservative users navigating volatile markets.
Frequently Asked Questions (FAQ)
❓ Is BUSD still worth anything?
Yes. Each BUSD token remains redeemable for $1 through Paxos until redemption is officially closed. However, no new tokens are being issued.
❓ Can I still trade BUSD?
On some exchanges outside Binance, yes—but liquidity is declining. Most platforms are phasing out support. It's recommended to convert BUSD to another stablecoin like USDC or FDUSD.
❓ What should I do with my remaining BUSD?
If you hold BUSD on Binance, it has likely already been converted to FDUSD. Otherwise, consider swapping it for USDC or USDT on supported exchanges.
❓ Why did regulators target BUSD?
U.S. regulators expressed concerns about financial stability and investor protection. The NYSDFS specifically cited risks related to Paxos’ role as an issuer and sought tighter control over stablecoin operations.
❓ Is FDUSD replacing BUSD?
Yes. Binance introduced FDUSD (First Digital USD) as its new preferred stablecoin. While not as widely recognized yet, it’s gaining traction within the Binance ecosystem.
❓ Are there any risks in holding old stablecoins?
Yes. As support diminishes, you may face reduced liquidity, higher slippage, or inability to trade. Always stay updated on exchange announcements regarding deprecated tokens.
Final Thoughts: The Legacy of BUSD
BUSD was more than just another stablecoin—it represented a bold attempt to merge regulatory compliance with digital innovation. For years, it offered users a safe haven during market turbulence, backed by robust oversight and real-dollar reserves.
However, regulatory headwinds proved too strong. With Binance pivoting to FDUSD and users migrating en masse, the era of BUSD has effectively ended.
For today’s investors, the lesson is clear: even the most trusted crypto assets can be reshaped overnight by policy changes. Staying informed—and agile—is key in this dynamic space.
👉 Stay ahead of crypto trends with real-time data and secure trading tools.