Capitalization of Binance USD collapses amid problems with regulators
2023.03.03 04:01
Capitalization of Binance USD collapses amid problems with regulators
By Tiffany Smith
Budrigannews.com – The market cap of Binance USD (BUSD) has fallen below $10 billion for the first time in almost two years as a result of a planned delisting from a major crypto exchange and a regulatory crackdown on the token issuer in the United States.
Since its all-time high (ATH) of $23.49 billion on November 15, just a few days after the shocking collapse of FTX, BUSD’s market cap has been steadily falling.
The stablecoin’s marketcap has dropped to $9.66 billion as of this writing, a level not seen since June 29, 2021.
On February 12, the United States Securities Exchange Commission (SEC) may have filed a lawsuit against Paxos against BUSD for allegedly violating investor protection laws. SEC has removed $6.65 billion from BUSD’s market capitalization since then.
On February 12, Paxos was also told by the New York District of Financial Services (NYDFS) to stop minting and issuing BUSD, which probably helped the stablecoin drop in market cap.
Coinbase, a cryptocurrency exchange, told Cointelegraph earlier this week that the stablecoin “no longer met our listing standards” and would be removed from its exchange on March 13.
Many people attribute the recent controversy surrounding Silvergate Bank’s late filing of its annual 10-K financial report on March 1 to the wider crypto market’s decline in market cap.
The Binance-branded stablecoin quickly rose to become the third largest stablecoin after Tether (USDT) and USD Coin (USDC) upon its launch in September 2019.
The stablecoin currently ranks 10th among all cryptocurrencies in terms of market capitalization. Solana (SOL), which has a market capitalization of $7.98 billion, is the next crypto token on the list.
It is interesting to note that Binance CEO Changpeng “CZ” Zhao stated in a Twitter Spaces post on February 14 that he never gave the Binance stablecoin project much thought and that he thought it “may fail” when it first launched.
BUSD market cap dropped -$2.45B (from 16.1B to 13.7B as of now), and most of it has moved to USDT.
USDT marketcap + 2.37B (From 67.8B to 70.1B)
USDC also declined -739M (from 42.3B to 41.5B)
Landscape is shifting.
(Note: BUSD is NOT issued by Binance.) pic.twitter.com/kVrZUYjuOh
In an effort to diversify its stablecoin holdings, Binance recently issued nearly $50 million worth of TrueUSD (TUSD) to compensate for the decrease in demand for BUSD.
