Crypto exchange Coinbase is dropping the Binance-branded BUSD stablecoin from its platform.
According to a tweet posted Monday (Feb. 27) by Coinbase, the BUSD stablecoin failed to meet Coinbase’s own internal listing standards and as a result is slated to be de-listed next month (March 13) across Coinbase.com, Coinbase Pro, Coinbase Exchange, and Coinbase Prime.
BUSD, which launched in 2019, is the third-largest stablecoin by market capitalization, behind Tether (USDT) and USD Coin (USDC). USDC is Coinbase’s own native stablecoin offering, issued in partnership with crypto firm Circle.
“We regularly monitor the assets on our exchange to ensure they meet our listing standards,” Coinbase wrote, emphasizing that customers’ BUSD funds will remain accessible and the exchange’s users will have the ability to withdraw their funds at any time.
According to information on Coinbase’s website, its internal digital asset listings group is responsible for voting on and vetting assets able to be traded across the exchange.
Coinbase is so far the first crypto trading platform to de-list and halt commerce with the Binance-branded BUSD stablecoin.
During his company’s recent fourth quarter 2022 earnings call (Feb. 21), Coinbase CEO Brian Armstrong said to investors that “bringing stablecoins into the regulatory perimeter” would be considered one of his two big regulatory “wins” for the upcoming fiscal year.
“Policy is my top priority for this year … Coinbase has an important role to play around crypto education, advocacy, and policy,” Armstrong added.
As reported by PYMNTS, both the U.S. Securities and Exchange Commission (SEC) and the New York Department of Financial Services (NYDFS) have BUSD, and the crypto industry more broadly, in their regulatory sights.
The SEC reportedly issued New York-regulated blockchain infrastructure and financial services platform Paxos Trust a Wells Notice informing the crypto company of its potential plans to bring enforcement actions against it for violating federal investor protection laws as they relate to the company’s issuance of Binance-branded BUSD stablecoins.
Paxos stopped minting BUSD stablecoins last week (Feb. 21) as a result of regulatory scrutiny.
In response to the Paxos news, PayPal reportedly paused its own in-the-works stablecoin project, which was being undertaken in partnership with Paxos but which was unrelated to Binance.
PYMNTS has been closely tracking how the SEC’s latest slate of enforcement actions appears to be targeting stablecoins in particular.
Due to both historical and recent cracks in Binance’s own reputation, including reports the company might be leaving the U.S., admitted gaps in compliance, and an unwillingness to provide more transparency into its opaque operations, industry observers have wondered whether the recent federal actions and now Coinbase’s own de-listing of BUSD have more to do with the exchange itself rather than the fundamentals of stablecoin assets.
A representative for Binance did not immediately reply to PYMNTS’ request for comment.
Both Binance and the crypto sector have come under increasing scrutiny since last year’s collapse of the FTX exchange, a landmark for the industry in which Binance played a key role.
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