Controversy around BUSD drives calls for decentralization

A recent proposal for Binance on Twitter has sparked a response from the firm’s CEO. An account named @frxresearch recently proposed that the cryptocurrency exchange Binance develop its own decentralized stablecoin, similar to DAI.

CZ: I’d prefer someone else to do it

However, in response, Binance CEO Changpeng Zhao said that he would prefer it if someone else did it so that the cryptocurrency industry could remain more decentralized.

Paxos, the business behind BUSD, was told to stop issuing the coin by New York’s leading financial regulator, prompting the demands for a decentralized alternative.

BUSD is one of the most prominent stablecoins in circulation, and it is issued and redeemed by Paxos Trust Company, which has its headquarters in New York. Paxos Trust Company and BUSD are both subject to oversight by the New York Department of Financial Services.

The NYDFS announcement indicated that Paxos had been directed to cease issuing BUSD owing to “unresolved concerns” connected to its “oversight” of its affiliation with Binance via Paxos-created BUSD. These “issues” were related to Paxos’s “oversight” of Paxos’s association with Binance.

Binance to offer continued support for BUSD

Earlier today, Zhao said that Binance would continue to support BUSD for the foreseeable future, despite the fact that the regulator’s decision would affect the company’s market valuation.

The action comes in the midst of a more significant assault on Binance by authorities in the United States, with the Justice Department examining the exchange for possible breaches of money laundering and sanctions laws.

Paxos will be sued by the Securities and Exchange Commission (SEC) for allegations that BUSD is an unregistered security.