After BUSD Dilemma, Binance Is Taking The Next Steps In Regards To Stablecoins

After facing regulatory action from the SEC against its native stablecoin, Binance USD (BUSD), the cryptocurrency exchange has turned to a new set of stablecoins. The SEC issued a Wells notice, claiming that BUSD breaches U.S. securities law, which prompted the NYDFS to request that BUSD issuer Paxos Trust halt the production of new BUSD.

As a result of the ban on BUSD minting, Binance is exploring alternative approaches to meet its stablecoin requirements.

On-chain data from Lookonchain suggests that the largest cryptocurrency exchange in terms of trading volume is seeking to incorporate TrueUSD (TUSD) and endorse some decentralized stablecoins. Between February 16 and 24, the crypto exchange produced 180 million TUSD.

TrustToken, which operates the US dollar-pegged stablecoin TUSD, has been a partner of Binance since June 2019, allowing Binance to buy and redeem TUSD with zero fees. However, Binance auto-liquidated TUSD to BUSD in September 2022 to increase its market share. With a ban on BUSD, Binance is now increasingly minting new TUSD to meet its stablecoin requirements.

Binance CEO Changpeng Zhao stated the exchange would look at other options to diversify its stablecoin away from BUSD, and the exchange subsequently added support for Liquity and launched TrueFi perpetual contracts. Both tokens surged 200% in the last month after Binance’s listing.