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Binance CEO drops bombshell about BUSD: investors in shock

Binance CEO Changpeng “CZ” Zhao has disavowed Binance-branded stablecoin BUSD after regulatory action prompted the cessation of its minting. On Monday, BUSD issuer Paxos stated that it would stop generating new tokens following a request from the New York Department of Financial Services (NYDFS). However, Paxos rejected claims from regulators that the cryptocurrency, which is pegged to the US dollar, constituted an unregistered security.

Speaking on Twitter Spaces on Tuesday, CZ said, “BUSD is not issued by Binance. We have an agreement to let them [Paxos] use our brand, but that’s not something that we created.” He added, “With BUSD gone, BUSD slowly winding down over time, we will continue to work with more stablecoin issuers or creators,” while also highlighting existing support for other stablecoins such as USD Coin (USDC) and Tether (USDT).

Furthermore, Zhao criticized Bloomberg’s report that Circle, a rival stablecoin issuer, had alerted the NYDFS about concerns that Binance lacked sufficient reserves to back up BUSD tokens. “I don’t really believe Circle would do that – I don’t think a professional industry peer will want to do that to another industry peer,” he said. “It just hurts the overall industry as we’re seeing now…I wouldn’t take that article too seriously right now.”

Stablecoins have been in the spotlight recently, with regulators scrutinizing their potential risk to financial stability. In September 2021, the Financial Stability Oversight Council (FSOC) announced that it was exploring potential regulation for stablecoins, warning that their widespread use could destabilize the economy.

The regulation of stablecoins has led to concerns that they could lose their pegs to the US dollar, leading to potential losses for investors. The recent regulatory action against BUSD has caused some investors to question the safety of stablecoins, while others believe that this scrutiny could ultimately benefit the industry.

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Greetings, I go by the name of Flavien - a devoted supporter of cryptocurrency and a tech aficionado who has been keeping track of the developments in the world of blockchain and digital currencies since 2019. The potential of decentralized digital currencies to revolutionize our financial systems has captivated me, and I'm constantly exploring the most recent trends and advancements in this ever-evolving industry. As a content creator for Krypto Channel, my aim is to deliver informative and engaging articles that shed light on all aspects of the crypto world. Whether you're a seasoned investor or simply curious about blockchain technology, I am here to keep you updated on the latest happenings and trends. Being part of this lively and dynamic community is an honor, and I am thrilled to share my passion for cryptocurrency and blockchain with all of you.
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