Binance Increases USDC Holdings as BUSD’s Market Cap Slides Lower

February 21, 2023 Bitcoin.com

Binance mints 50M TrueUSD days after Paxos ordered stop issuing BUSD

February 17, 2023 Coin Telegraph

Despite the minting of $50 million in TUSD, Zhao previously said the regulatory crackdown on stablecoins in the U.S. will cause the USD-back stablecoin market to “shrink.”

Only days after reports of United States regulatory scrutiny of Paxos and Binance USD (BUSD), cryptocurrency exchange Binance has minted nearly $50 million worth of TrueUSD (TUSD).

The transaction took place on Feb. 16, according to data from Etherscan, and also comes two days after Binance CEO Chanpeng 'CZ' Zhao said in a Feb. 14 Twitter Spaces that Binance would look to “diversify” its stablecoin holdings away from BUSD.

We're live!

Tune-in to our Twitter Space AMA with @cz_binance below https://t.co/bXIztCKdry
— Binance (@binance) February 14, 2023

Despite minting nearly $50 million in TUSD from the TrustToken platform’s smart contract on Feb. 16, CZ had earlier said the recent regulatory action by the United States Securities Exchange Commission (SEC) and the New York Department of Financial Services (NYDFS) over the long term may lead to a fall in the dominance of U.S. dollar-backed stablecoins.

“I think with the current stances taken by the regulators on the U.S. Dollar-based stablecoin, the industry will probably move away to a non-U.S. Dollar-based stablecoin, back to algorithmic stablecoins.”

“There’s multiple agencies putting applied pressure there. It is just going to shrink the U.S. Dollar-based stablecoin market,” he added.

CZ said that “this has prompted us to look for more options in different places” and that they’re now exploring other options.

50M #TUSD minted at #Binance and the price of $TRU increased by 200%.

On-chain data shows that #Alameda and #justinsun are the two largest minters of $TUSD.#Alameda minted a total of 1.64B $TUSD in history.#justinsun minted a total of 889M $TUSD in history. pic.twitter.com/N1tUjFQm5U
— Lookonchain (@lookonchain) February 16, 2023

While the CEO stated that Binance would provide more support for USD Coin (USDC) and Tether (USDT) over the short term — in expectation that BUSD “winds down over time” — he added that they’re now looking to explore more into Euro and Japanese Yen-based stablecoins.

As for BUSD, CZ said “the existing circulating supply of BUSD is there and safe, and as more people want to redeem, they will be burned.”

Interestingly, the Binance CEO added that he was never too bullish on the success of the Binance-branded BUSD stablecoin anyway:

“To be honest BUSD was never a big business for us, when we started I actually thought the BUSD project may fail, so we actually don’t have very good economics on that collaboration.”

Interesting, in September, TUSD was one of the stablecoins that Binance auto-converted to BUSD to enhance liquidity and capital-efficiency for its users. Other stablecoins that got auto-converted were USDC and USDP Stablecoin (USDP). This drove up BUSD’s share in the stablecoin market from 10% to 15% in a matter of weeks.

TrustToken launched TUSD on Mar. 5, 2018, which operates on the Ethereum, Avalanche, MATIC and Tron networks.

New TUSD is minted whenever a buyer wires USD to a third-party escrow that holds USD deposits on Prime Trust's behalf. Once received, TUSD will be transferred in a 1:1 ratio to the USD sent to the trader’s nominated ERC-20 or BEP-2 wallet address.

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February 10, 2023 Bitcoin.com

Stablecoin Economy Continues to Shrink Shedding Close to 5% in 2 Months

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Stablecoin GUSD’s Supply Jumps Close to 130% Higher in 30 Days

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Stablecoin Blues: $3 Billion Erased From the Dollar-Pegged Token Economy, HUSD Depegs, USDC Supply Drops 10%

November 2, 2022 Bitcoin.com

A stablecoin’s rise in market share has ignited the ‘Second Great Stablecoin War’

October 24, 2022 Coin Telegraph

Auto-Convert

Since Binance announced it would auto-convert USDC, USDP and TUSD into BUSD on Sept. 6, BUSD’s share of the total stablecoin market has risen from 10.01% to 15.48%.

FTX CEO Sam Bankman-Fried (SBF) said the rise of Binance stablecoin BUSD could spark the “Second Great Stablecoin War,” given how fast its market cap has surged over recent months.

Bankman-Fried's recent comments come a month after Binance pushed ahead with plans to auto-convert a host of stablecoins supported on its exchange into BUSD on Sept. 6, — which has seen BUSD's share of the total stablecoin market rise since.

BUSD’s share of the total stablecoin market has risen from 10.01% on Sept. 7 to 15.48% on Oct. 22, according to crypto data aggregator Coin Metrics.

Meanwhile, BUSD’s market cap has risen 3.3% over the last 30 days to $21.7 billion, with the stablecoin only trailing Tether USD (USDT) at $68.4 billion and USD Coin (USDC) at $43.9 billion.

Commenting on the asset’s growth following the move, the FTX CEO noted via Twitter on Oct. 23 that “Binance converts USDC --> BUSD, and we see the change in supplies,” adding “thus begins the second great stablecoin war.”

Bankman-Fried noted that the first "Stablecoin War" was fought between five stablecoins in 2018, leading to USDT and USDC as the two leaders.

Today, USDT still holds a considerable lead with a 48% share of the stablecoin market, though it has fallen from 88% since 2020, while USDC has grown in market share from 10% to 32% in the same period.

Binance's stablecoin's rise is even more prominent, however, growing more than 30x from 0.5% to 15.48% in the same time frame.

Tether's share of the stablecoin market has dropped from 88% to 48% since 2020.

USDC has tripled its market share from 10% to 32%

BUSD (Binance's stablecoin) market share has grown by 30x from 0.5% to 15% pic.twitter.com/YpI89elHYU
— Will Clemente (@WClementeIII) October 18, 2022

SBF added that as BUSD continues to edge its way into the market as the big centralized players fight for dominance, there will likely be more projects sprouting up in the “non-fiat-backed-stablecoin space” also.

“It'll be interesting to see what emerges from the post-Luna and post-DAI-holding-USDC. My guess is that it will be something interest bearing or otherwise with some upside,” he added.

In September, Binance announced it would cease a long list of spot trading asset pairs for USDC, USDP Stablecoin (USDP) and TrueUSD (TUSD), with any users still holding the three stablecoins by Sept. 29 to have their holdings auto-converted to BUSD at a 1:1 ratio.

Binance stated that the move was a decision to enhance liquidity and capital efficiency for users. At the time, Binance said there were immediate plans to do the same to USDT, but noted that this "may change."

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