|
|
Regarding technical matters, there are actually two types of stablecoins with the full name BUSD. The first is issued by Paxos and is created on the Ethereum network using the ERC-20 standard, while the other is provided by Binance through the Binance Smart Chain (BEP-20) pegged to BUSD on Ethereum, maintaining a 1:1 value peg to the US dollar. Therefore, Binance itself does not issue BUSD on the ERC-20 network. It can be said that Binance collaborates with Paxos to provide a BEP-20 version of BUSD with a corresponding value on the Ethereum network.
Why did Paxos end its partnership with Binance?
In February 2023, the U.S. Securities and Exchange Commission (SEC) issued a warning that it might sue the issuer of the ERC-20 version of BUSD, Paxos Trust Company, alleging that BUSD was an "unregistered security." It's important to note that this was just a "warning," and the SEC did not formally file a lawsuit. Paxos had the option to respond to the SEC to explain the legitimacy of its mechanism. However, after the SEC issued the warning, Paxos promptly terminated its partnership with Binance and stopped issuing ERC-20 BUSD. On the same day, Binance CEO Changpeng Zhao announced that Binance would stop using BUSD as the primary trading currency. Still, he also mentioned that they would continue to support the existing BUSD value.
Impact of the BUSD/Paxos and U.S. SEC Event
Possibility 1: Gradual Exit of BUSD from the Market
Changpeng Zhao stated that Binance would no longer use BUSD as the primary trading currency and intended to transfer the value of BUSD to other stablecoins. Currently, there are no further details about how this would be implemented, but if it turns out to be true, and Paxos also no longer issues new ERC-20 BUSD, it could mean that BUSD in the market may gradually decrease.
Possibility 2: U.S. SEC Initiates Regulatory Action
The SEC's warning to sue Paxos for its operations could have broader implications. It serves as a warning to other cryptocurrency stablecoin issuers with similar operations, including Tether, the issuer of USDT. If the U.S. SEC intervenes with Paxos, other cryptocurrency issuers may also come under scrutiny. The United States has long sought to regulate cryptocurrencies, and the action against BUSD could be just the first step.
Impact of BUSD Delisting: Cryptocurrencies Still Under Scrutiny by U.S. Regulators
Binance announced on August 31, 2023, that it would gradually delist BUSD spot and leverage trading pairs with different cryptocurrencies and gradually suspend related services. Binance has repeatedly emphasized that users or investors holding BUSD must convert it into other assets, including through spot trading or swaps, before February 2024.
The recent BUSD delisting incident shows that Binance and Paxos, while clever in navigating the cryptocurrency space, were ultimately "defeated" by the U.S. SEC. Although Binance and Paxos have operated within the cryptocurrency market framework, Paxos is indeed certified by the New York State Department of Financial Services. When the SEC declared that BUSD was an unregistered security and intended to sue, Binance and Paxos were powerless. This incident illustrates that while cryptocurrencies have long pursued decentralization, the United States, particularly the SEC, appears to be accelerating cryptocurrency regulation. It may not necessarily be a zero-sum game between the two, but the future development of cryptocurrencies could continue to be influenced by the United States, especially the SEC. |
|
Post time 8-9-2023 09:23:34