- Binance Coin Price Drops Amid News About Paxos And Its Stablecoin BUSD
- BNB traded to a low of $284, extending the intraday decline from a high of $321 as uncertainty swallowed the stablecoin.
- Paxos, which issues and processes BUSD redemptions, has announced that it has terminated its relationship with Binance.
Binance exchange’s native coin, BNB, has widened intraday losses to more than 10% as price action continues to suffer from negative news.
BNB Price Falls 10% Amidst BUSD Report
As we reported earlier, Binance Coin fell nearly 6% in the morning as the market reacted to the news surrounding Binance USD (BUSD).
However, BUSD is the main stablecoin in the Binance ecosystem, and the news that Paxos has been ordered to stop issuing new tokens caused a massive outflow. Negative sentiment mounted when it emerged that the US Securities and Exchange Commission (SEC) was suing Paxos. Paxos announced later that day that he had ended his relationship with Binance regarding the brand’s link to BUSD.
Here’s a chart from one market analyst showing previous reactions to the news.
Binance Coin BNB Drops More Than 8% After New York Regulators Order Paxos Trust To Stop Making More #BUSD token. BUSD is a US dollar-backed stablecoin created in 2019 in a partnership between cryptocurrency platform Binance and blockchain Comp Paxos. BNB is Binance’s native token pic.twitter.com/TXu514EEQ6
— Holger Zschaepitz (@Schuldensuehner) February 13, 2023
Binance CEO Changpeng Zhao has announced that the exchange will continue to support stablecoins, but has acknowledged that there is a shift to other stablecoins as a result of regulatory uncertainty.
Therefore, Monday afternoon’s BNB price action is trading to a low of $284, the lowest level for Binance Coin since January 18, 2023. According to CoinGecko data, the coin is currently trading at around $286.
Today’s loss caused the price to drop -13% on the 7-day chart.