You may be surprised by the above title as few talk about an expiry of a particular crypto or a decentralized stable coin such as BUSD.
However when it comes to BUSD you better know that they would not be of any use beyond a certain date!
What is BUSD?
If you are new to crypto then this question needs to be answered your you :)
A stable coin is an essential part of the cryptoverse that helps the traders in exchanging the more volatile cryptos like BTC, ETH etc for these stable coins.
These are the fiat equivalent of crypto.
Doing these exchanges helps the investors manage risk and helps them in preventing value erosion when the crypto assets go against the price at which they had made a purchase.
A crypto Vs stable coin trade is a better alternative than trading crypto for fiat as it involves tedious tax computations and may not be an option that your exchange offers.
Some centralized exchanges CEX's may allow users to add fiat to their account but most decentralized exchanges do not have this feature so a stable coin is the viable alternative to trade and hold crypto in times of correction or when it comes to turning a directional price movement opportunity into a profitable trade.
BUSD is the stable coin from Binance and widely used on BSC its parent decentralized chain as a trusted stable coin.
The low gas fee of the BSC as compared to ETH make it the stablecoin of choice on both DEX's as well as Binance.
What is the Expiry of your BUSD?
Feburary 2024 has been set as the date beyond which Binance would not support BUSD
Why pull the plug on BUSD?
A stable coin needs an issuing agency and in the case of BUSD this is Paxos.
So this is the decision of Paxos to withdraw its support.
Why would Paxos pull out from an established stable coin like BUSD?
BUSD is both stable in terms of value and widely accepted and used.
Thus viability of the stablecoin is clearly not an issue here.
However it seems the closeness to Binance got it into the current situation.
On 13th Feb 2023 The New York Department of finance said that BUSD is an unregistered security.
It also ordered Paxos to halt the issue of BUSD.
Perhaps to comply with this notice Paxos has decided to stop its support to BUSD from Feburary 2024.
Though at the time of this event Binance had issued a clarification that BUSD was a product that was both owned and issued by Paxos.
The role of Binance was limited to licensing its brand name to be used in the Paxos product.
Without the issuance of fresh BUSD it may be difficult to maintain the peg of this useful stable coin.
Thus Binance too has decided to stop supporting BUSD from Feb 2024.
The Popup says it all
A pop up message in the Binance app has been informing users about the BUSD discontinuation and suggesting they exchange their BUSD to other assets.
Would there be a replacement for BUSD?
Binance and dex users would surely want an answer to this question.
In an official statement Binance has suggested that its users convert their BUSD to FDUSD another stable coin that started its issuance in June 2023.
As per Binance this is going to be a gasless transaction where each user can convert BUSD to FDUSD on a one to one ratio without having to pay any gas fee.
The First Digital USD (FDUSD) is being issued and managed by the First Digital group that operates its business out of Hong kong.
What to do with your BUSD?
One could do what Binance suggests. However if you want to make holding your stable coin rewarding then I have a suggestion.
The best thing that I can think of right now is to convert your BUSD to HBD.
HBD or the hive backed dollar is a stable coin of the Hive blockchain.
This is a zero gas fee blockchain which implies that moving HBD or even Hive from wallet to wallet is a zero fee transaction.
Earn 20% APR on the HBD you hold
If you want to keep your crypto in a stable coin then one of the best options is to hold it as HBD.
This HBD can be kept into HBD savings that generates a 20% APR
20% APR on a stablecoin is a very very good rate of return that can help you beat the inflation as well as make holding a stable coin more productive.
Final thoughts
The crypto landscape is very dynamic and one always needs to keep an eye on the changing landscape.
Joining leofinance.io as a Web 3.0 platform is a good opportunity to start your Web 3.0 journey and remain informed about what changes unfold around us on a day to day basis.