[ad_1]
Binance USD (BUSD) slipped out of the top five stablecoins by market capitalization over the weekend after its circulating supply fell below a billion, its lowest point since December 2020.
Data from CryptoSlate shows that BUSD’s circulating supply stands at 927 million tokens, representing a staggering 96% drop from its peak supply of 23.45 billion. This drop also had a significant impact on its trading volume below $50 million over the past 24 hours.
The Binance-backed stablecoin’s problems began last year after the U.S. Securities and Exchange Commission (SEC) called it a security in its legal actions against the cryptocurrency exchange. Additionally, BUSD issuer Paxos was forced to shut down other currencies of the asset by the New York Department of Financial Services. Binance and Paxos have vehemently rejected this SEC classification.
These developments caused a rapid exodus of the struggling stablecoin within the crypto community, as Binance immediately began offering its users several stablecoin alternatives, including TrueUSD (TUSD) and First Digital USD (FDUSD).
January 5, Binance revealed that it has completed the automatic conversion of eligible user balances in the BUSD token to FDUSD. It further explained that it no longer supports BUSD withdrawals and urged its users to Manually swap these BUSD tokens for FDUSD tokens at a 1:1 conversion rate on Binance Convert.
Despite this, Binance and Paxos have committed to supporting BUSD until its complete elimination this year.
USDT and USDC maintain stablecoin dominance
With the decline of BUSD, the top five stablecoin markets by market capitalization now include new entrants like TUSD and FDUSD, two stablecoins that have been heavily promoted by Binance.
However, Tether’s USDT remains the dominant player in this space, controlling approximately 70% of the market with a market capitalization of over $90 billion. It is closely followed by Circle’s USDC, which has a market capitalization of $24.56 billion.
Tom Wan, researcher at 21Shares underlines that for a stablecoin to effectively combat these giants, it would require integration into centralized exchanges, incorporation into DeFi platforms, and application in payment and fund transfer functions.
[ad_2]
Source by [author_name]