13 Mar 2023 Simon Briggs
Binance Shifts Its $1 Billion BUSD Fund Into BTC, ETH, And BNB
The "Industry Recovery Initiative," which holds $1 billion in BUSD, was started by Binance after the cryptocurrency exchange FTX went down in November. Changpeng Zhao, CEO of Binance, declared that the money will now be converted to BTC, ETH, and BNB, after several months on BUSD.
Binance established the "Industry Recovery Initiative" in November - a fund to assist struggling crypto companies experiencing liquidity problems as a result of the famed crypto exchange FTX's bankruptcy. As part of this, Binance has created $1 billion worth of Binance USD Coin (BUSD), which may be exchanged for Bitcoin (BTC), Ethereum (ETH), and Binance Coin at any moment (BNB). It seems that the moment has come, as Zhao announced the fund transfer on Twitter.
“Given the changes in stablecoins and banks, #Binance will convert the remaining of the $1 billion Industry Recovery Initiative funds from BUSD to native crypto, including #BTC, #BNB, and ETH. Some fund movements will occur on-chain. Transparency.” Zhao tweeted.
This decision to convert funds from BUSD to other tokens is indeed not surprising given the increased regulatory scrutiny around stablecoins, especially in the US. The recent suspension of BUSD trading on Coinbase and Paxos Trust's decision to stop minting the Binance-branded stablecoin are clear indications of the regulatory pressure faced by stablecoins.
Binance's decision to limit the use of BUSD and focus on other assets such as BTC, ETH, and BNB is a natural response to the current regulatory environment. CZ's announcement of the conversion of funds and the emphasis on transparency is likely an attempt to address concerns about irregular activities between Binance and its US subsidiary, Binance.US.
Are the chosen cryptos performing well?
Over the past week, the crypto sector has experienced significant price movements, with many of the top cryptocurrencies experiencing gains or losses of 10% or more.
Bitcoin (BTC), the largest cryptocurrency by market capitalization, started the week off barely holding on to around $22,000. However, the leading crypto’s calm moment was short-lived, and BTC experienced a sharp correction, falling as low as $19,628.25 on March 10th before rebounding to over $23,000 as of press time.
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, followed closely Bitcoin’s movements after starting the week off around $1,600, ETH plummeted to $1,378.53 on March 10th. Since then, ETH has managed to erase all of its losses and currently trades at around $1,630.
Binance Coin (BNB), the native cryptocurrency of the Binance exchange, has been among the top performers over the past week, managing to secure a seven percent price gain. Starting the week off around $285, BNB has also made a sharp price decline on March 10th, but since then the BNB coin made a full recovery, trading at $306.97, which is close to its 90-day high of $337.32.Bitcoin Ethereum Cryptocurrency exchange Binance Exchanges News btc eth Bitcoin price Binance Exchange exchange binance coin bnb cryptocurrency news crypto news Crypto Price Ethereum Price Changpeng Zhao Stablecoins BUSD Binance.US