The recent announcement from Binance could have implications for individuals holding Shiba Inu and XRP.
A well-known cryptocurrency exchange, Binance, has issued a notable announcement that may capture the attention of Shiba Inu and XRP investors. Commencing from October 25, 2023, Binance Loans, a service offered by Binance, will be terminating all BUSD loan agreements and collateral positions.
In a blog post, Binance has conveyed that its Binance Loans (Flexible Rate) service will conclude all existing BUSD loan agreements and collateral positions on October 25 at 8:00 a.m. (UTC). Users are strongly advised to settle any loans that might be affected by this change before October 25 at 7:59 a.m. (UTC) to mitigate the risk of potential losses.
Source Link: Binance Blog
Nonetheless, Binance Loans (Flexible Rate) will persist in its support for other stablecoins, which can be used as both loanable assets and collateral. These stablecoins include FDUSD, USDT, TUSD, USDC, and DAI.
Binance Flexible Loan represents an independent, overcollateralized, and open-ended loan offering. Within this framework, users have the flexibility to establish distinct loan positions, each comprising a single collateral-loan combination. For instance, one position might consist of (BUSD collateral + ETH loan), while another could involve (USDT collateral + BTC loan).
The loan-to-value (LTV) ratios, as well as the margin call and liquidation LTV thresholds, are tailored individually for each collateral-loan pair position.
In August, Binance expanded its offerings by including SHIB as both a loanable asset and collateral asset for the Flexible Loan and VIP Loan services. Additionally, a review of the Binance Loans page indicates that XRP is likewise endorsed as both a loanable asset and collateral asset.
Binance is persistently reducing its support for BUSD as a response to the regulatory challenges that the stablecoin encountered earlier this year.
Paxos, the entity behind BUSD, halted the creation of new tokens subsequent to receiving a directive from the New York State Department of Financial Services in February of this year.
Binance has officially announced its intention to discontinue support for the BUSD stablecoin by February 2024. Users are strongly encouraged to transition their assets into alternative stablecoins before the specified date.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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