It’s a weird time to be a crypto investor. On the one hand, token prices have surged to start 2023, with several key runners on watch. On the other, stablecoins like Binance USD (BUSD-USD) are on watch, as investors fret about the potential for regulation in this corner of the crypto market.
However, for Binance USD in particular, there’s another concern investors are focusing on today. Coinbase (NASDAQ:COIN) has announced that it will be delisting the Binance USD stablecoin from its exchange on March 13.
This move purportedly comes as a result of BUSD failing to meet Coinbase’s listing standards. An internal review process was completed, in which a determination was made that this stablecoin would be suspended.
Accordingly, given the concerns around previous stablecoin collapses last year, investors appear to be on watch. Let’s dive into what investors should make of this news.
Is Now the Time to Transfer Money Out of Binance USD?
It’s unclear what drove this internal decision from the Coinbase brass to suspend the BUSD stablecoin. Indeed, while users will still be able to access their BUSD and make withdrawals at any time, it’s unclear what this will mean for Coinbase’s business as well. Currently, BUSD ranks No. 9 in terms of market capitalization in the crypto sector. Thus, this is no small token we’re talking about here. So, a significant number of users may be affected by this move.
There are some clear strategic reasons why Coinbase may have chosen to forego utilizing BUSD on its network. For one, Binance is a competing network. Two, Coinbase earns significant interest income from its Circle holdings (parent company of stablecoin USDC). And third, Coinbase users may not fret about this decision as much as many may think, particularly when the BUSD stablecoin provides unique benefits to users of the Binance exchange.
I’ll be interested to see what, if any, response comes from Binance on the news front. But for now, it’s clear that Coinbase is attempting to carve out its path as a leading crypto exchange in the U.S. and globally.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.