Paxos has been ordered to stop issuing BUSD token due to unresolved issues related to Paxos’ oversight of its relationship with Binance
The controversy surrounding Binance’s stablecoin, BUSD, has led to calls for a decentralized alternative.
In a recent tweet, @frxresearch suggested that Binance create its own decentralized stablecoin, similar to DAI.
However, Binance CEO Changpeng Zhao responded by saying that he would prefer someone else to do it to keep it more decentralized.
The calls for a decentralized alternative come after New York’s chief financial regulator ordered Paxos, the company behind BUSD, to halt the issuance of the token.
BUSD is among the world’s biggest stablecoins, issued and redeemed by the New York-based Paxos Trust Company, both of which are subject to regulation by the New York Department of Financial Services.
The NYDFS statement revealed that Paxos had been instructed to stop creating BUSD due to “unresolved issues” pertaining to its “oversight” of its association with Binance through Paxos-created BUSD.
Earlier today, Zhao stated that Binance would support BUSD for the foreseeable future, but the regulator’s decision would reduce its market cap.
The clampdown comes amid a wider crackdown on Binance by U.S. regulators, with the Justice Department investigating it for suspected money laundering and sanctions violations.
The SEC plans to sue Paxos, alleging that BUSD is an unregistered security.
The price of BNB, Binance’s native exchange token, is down more than 5% over the past 24 hours.
Source: https://u.today/binances-busd-controversy-prompts-calls-for-decentralized-alternative