LONDON: New York’s chief financial regulator has ordered Paxos, the company behind the stablecoin of the Binance cryptocurrency exchange, to stop issuing the token, Binance CEO Changpeng Zhao said in a tweet on Monday.

The Binance USD (BUSD) stablecoin is issued and redeemed by New York-based Paxos, both of which are regulated by the New York Department of Financial Services.

The token, which is designed to keep a steady value and widely used at Binance, is backed by reserves of traditional cash and US Treasuries, according to Paxos’ website.

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“We were informed by Paxos they have been directed to cease minting new BUSD by the New York Department of Financial Services (NYDFS),” Zhao tweeted. “As a result, BUSD market cap will only decrease over time,” he said, adding that Paxos has assured Binance the funds were fully covered by Paxos’ bank reserves.

Paxos and NYFSD did not immediately respond to request for comment sent outside US business hours.

Binance USD is the seventh largest cryptocurrency, with more than $16 billion in circulation, according to market tracker CoinGecko.