The community of lending protocol Aave is exploring the possibility of freezing the use of Binance USD (BUSD) as collateral amid SEC pressure on Paxos, the exchange's cryptocurrency stablecoin partner.
According to the initiative, the stablecoin should be frozen in the protocol due to the risks of decoupling and arbitrage in the context of the expected zeroing of the cryptoasset's market supply. The author of the initiative has added the BUSD has no growth prospects.
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At the moment, the proposal has received more than 1,300 hits, nine approvals and four reviews, all of them with words of support. One of the users has even gone so far as to call for the total elimination of BUSD to reduce potential risks.
The price of the stablecoin momentarily fell below $0.995 yesterday.
On February 10 it became known the New York State Department of Financial Services had launched an investigation into Paxos.