The market capitalization of the BUSD stablecoin fell below $4 billion
Date: 2023-08-07 Author: Karina Ziganova Categories: BLOCKCHAIN, IN WORLD
The US dollar-pegged stablecoin Binance USD (BUSD) is going through hard times.
According to CoinGeckp, the once-popular asset’s market capitalization has dipped nearly 16% over the past 30 days. At the time of writing, the capitalization of BUSD is $3.4 billion - we recall that back in November 2022 this figure exceeded $23 billion. Thus, Binance USD and TrueUSD now share less than $500 million.
The market share of Binance USD has been declining for several months in a row, without showing any signs of slowing down.
BUSD losing influence
The market capitalization of BUSD began to decline after the collapse of the infamous FTX crypto exchange. Rumors that Binance would be a new target for the US Department of Justice sparked a net withdrawal of $3.6 billion within 7 days and a major buyout by market makers.
In February, the issuer of the stablecoin Paxos announced the termination of the minting of new tokens, citing the order of the state regulator, the New York City Department of Financial Services (NYDFS). On the same day, there were reports in the media that the US Securities and Exchange Commission (SEC) was preparing to sue Paxos for offering unregistered securities.
The final blow came as a result of the June 5 SEC lawsuit against Binance. At the center of the controversy this time was the offer by the exchange of unregistered securities, including the platform's native token BNB and BUSD.
Binance switched to other stablecoins
Binance launched BUSD in 2019. Backed by the world's largest cryptocurrency exchange, the stablecoin managed to reach a market capitalization of $1 billion in just 261 days. A year later, 97 trading pairs with BUSD were registered on the platform, and at the peak their number exceeded 300.
However, amid legal issues and the growing dominance of Tether, the crypto exchange reversed its course on BUSD.
On August 2, Binance removed 8 spot trading pairs from BUSD. In addition, during the recent Binance Launchpool events, the exchange has favored alternative stablecoins TUSD and First Digital USD (FDUSD).
