Coinbase suspends trading of BUSD stablecoin due to listing standards, but funds remain accessible.
Coinbase, a leading San Francisco-based cryptocurrency exchange, announced its decision to halt trading of the Binance USD (BUSD) stablecoin on March 13, citing its strict “listing standards.” BUSD is currently the third-largest stablecoin by market capitalization, but it will no longer be available for trade on Coinbase.com (simple and advanced), Coinbase Pro, Coinbase Exchange, and Coinbase Prime platforms. While Coinbase noted that BUSD funds would remain accessible to customers, they would not be able to trade the stablecoin on the exchange anymore.
A spokesperson for Coinbase shared that the decision to suspend BUSD trading was based on the exchange’s internal monitoring and review processes. Upon reviewing BUSD, the exchange determined that it no longer met Coinbase’s stringent listing standards and, as such, would be suspended. Binance has not commented on the decision as of writing.
According to Coinbase’s website, its digital asset listings group evaluates assets against legal, compliance, and technical security standards using a rigorous vetting and review process. Additionally, the group performs ongoing monitoring to ensure that listed assets continue to meet the established standards.
More FUD for Binance?
In February, the United States Securities and Exchange Commission (SEC) reportedly issued a Wells notice to blockchain infrastructure provider Paxos Trust, which is the issuer of BUSD. The notice indicated that the SEC was planning an enforcement action against the company. In addition, the New York State Department of Financial Services directed Paxos to stop issuing BUSD on February 13, which led to a significant $2 billion drop in the stablecoin’s market capitalization within a few days.
In response, Coinbase posted a Twitter thread the following day stating that “stablecoins are not securities.” However, the exchange also admitted that it was uncertain which aspects of BUSD might be of interest to the SEC. Reportedly, Paxos has been in “constructive” discussions with the regulatory agency since February 21.
BUSD supporters, on the other hand, believe this was done in retaliation for Binance’s recent tension with USDC.
The regulatory landscape surrounding stablecoins has become increasingly complex and ambiguous in recent years. While regulators such as the SEC have shown an active interest in these assets, the exact criteria for their classification and regulation remain a matter of debate. As such, it is crucial for issuers and exchanges to closely monitor regulatory developments in the space.
In summary, Coinbase’s decision to suspend BUSD trading appears to be based on the coin’s presumable “inability” to meet the exchange’s strict listing standards. While customers can still access their BUSD funds, they will no longer be able to trade the stablecoin on Coinbase’s platforms.