Aave community moving toward the elimination of BUSD from the lending platform amid ongoing hurdles with BUSD back-end company with the regulatory bodies.
Aave is a decentralised Crypto lending system on the Ethereum blockchain. This platform allows users to lend, borrow, and earn interest on crypto assets. On this platform, BUSD is also a better option for crypto traders to lend & borrow stable money in a fully decentralised medium.
On 14 Feb 2023, Marc Zeller, an Aave community member, submitted a proposal to freeze the BUSD reserves on the above protocol.
Zeller explained:
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“As there’s no real prospect of growth and the inability to mint new BUSD might hurt peg arbitrage opportunity and asset peg. It seems that the most reasonable path for Aave is to freeze this reserve and invite users to switch to another stablecoin among the diversity present in Aave.”
Through his Twitter profile, Zeller said that in 2024 BUSD redemption will be stopped by Paxos so the value of each BUSD will be equal to $0 in the long term.
tweet above is a shitpost. The trick is that SAI is redeemable by 1$ worth of ETH when they stopped it, and obv ETH is worth much more now than back then.
In 2024 Paxos will stop the redemption, and the long-term value of BUSD will be zero
— Marc Zeller
(@lemiscate) February 13, 2023
Paxos, BUSD & SEC
BUSD stablecoin is a top pair on the Binance exchange. Paxos is the backend company behind BUSD and also this company owns BUSD stablecoin wholly.
Just a day ago, the United States Securities and Exchange Commission (SEC) sent a Wells notice to the Paxos team about the nature of BUSD.
As per the SEC notice, BUSD stablecoin is a security asset. And also the New York financial regulators ordered Paxos to stop minting new BUSD.
Paxos team confirmed that BUSD is not a security and also said that it will follow all the orders issued by the regulatory bodies but will engage with the SEC agency on this matter.
Binance exchange founder Changpeng Zhao (CZ) also responded on this matter and confirmed that the exchange will remain supportive to the BUSD users despite BUSD being a product service from Paxos and also confirmed that it will drive a path to adopt other best stablecoin as a main trade pair.
7/ Binance will continue to support BUSD for the foreseeable future. We do foresee users migrating to other stablecoins over time. And we will make product adjustments accordingly. eg, move away from using BUSD as the main pair for trading, etc.
— CZ
Binance (@cz_binance) February 13, 2023
Read also: Indian finance minister says 1% TDS on Crypto aims to trace money laundering
Aave community member’ proposal to suspend BUSD lending
https://bitcoinik.com/aave-community-member-proposal-to-suspend-busd-lending/feed/
https://bitcoinik.com/aave-community-member-proposal-to-suspend-busd-lending/feed/
