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BUSD Stablecoin Inches Toward $1 Peg After Binance CEO Comments
Changpeng Zhao on Tuesday distanced himself from the Binance-branded stablecoin.
Updated Mar 8, 2024, 4:48 p.m. Published Feb 15, 2023, 9:40 a.m.
Binance USD (BUSD), the third-largest stablecoin by market cap, is returning to its intended $1 peg after Binance CEO Changpeng Zhao commented on the crypto exchange’s connection to the popular Paxos Trust Co.-issued token on Tuesday.
BUSD, which is backed by short-term Treasurys and cash-like assets, rallied to $0.9997 in European morning hours on Wednesday, recovering from a two-year low of $0.9950 hit after the New York Department of Financial Services (NYDFS) on Monday ordered Paxos to stop minting more of the tokens.
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“BUSD is not issued by Binance,” Zhao said during a Twitter Spaces on Tuesday. “We have an agreement to let them [Paxos] use our brand, but that's not something that we created.”
Zhao's comments probably improved sentiment for the tokens among traders, as some crypto enthusiasts on Twitter pointed out earlier this week.
Paxos has already burned more than $700 million of BUSD tokens since Monday.
“With BUSD gone, BUSD slowly winding down over time, we will continue to work with more stablecoin issuers or creators,” Zhao said, citing existing support for other stablecoins such as USD coin (USDC) and tether .
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