Paxos and Binance Terminate BUSD Partnership, Stop BUSD Minting

Paxos has released a media statement announcing that it will soon stop minting BUSD. The development comes after the blockchain and tokenization infrastructure platform announced that it will end its relationship with Binance to issue BUSD. This will take effect on February 21, 2023; however, the reserves will continue to be managed by the Paxos Trust.

Tokens in the reserve are backed 1:1 by USD and stored in remote accounts in bankruptcy. Paxos is working with the New York Department of Financial Services to stop issuing stablecoins.

Clients can rest assured that their assets are safe as Paxos will continue to support BUSD while allowing clients to redeem tokens until February 2024.

The platform will extend all facilities to existing and new customers. Another option is to convert the tokens into Pax Dollars, also known as USDP. Needless to say, this is in addition to redeeming funds in USD.

However, there is one question that the community has been asking, wondering if the update was due to the SEC sending a notice to Paxos about the BUSD release. The SEC claims in the notice that BUSD is actually a security that can be offered without registration. Statements from Paxos or Binance have not been made public.

It’s still safe to assume that both partners, now nearly at the end of their relationship, are prioritizing customer safety by ceasing distribution.

Echoing the sentiment in the press release, Paxos said it will continue to maintain strong regulatory capital to protect the interests of its clients. Additionally, it is designed to support long-term goals by ensuring summaries are more robust or greener than ever before. Paxos seeks to be the leader in global blockchain tokenization infrastructure. Stopping the minting process of new BUSD tokens is unlikely to hinder the achievement of the goal.

Even with the latest update, the process of transitioning to a better financial system will continue to be discussed. Paxos is known for its commitment to transparency and governance. The business has yet to discuss its future roadmap with the community; only then will it become clear how it plans to achieve its goals.

Paxos’ blockchain solutions are backed by strong partnerships with companies such as Nubank, Bank of America, Mastercard, Interactive Brokers, and PayPal. In other words, even though BUSD token mining has stopped, there is nothing stopping Paxos from making progress in the coming days.

Further bolstering community confidence in Paxos is its $540 million investment round, which included participation from investors including Founders Fund and Declaration Partners.

Source of information: Compiled from CRYPTONEWSZ by 0x Information.Copyright belongs to the author, without permission, may not be reproduced

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