The demise of the BUSD stablecoin is a slow and steady process. Unlike other pegged currencies in the past, the asset was never hacked or stolen. However, regulatory pressure prevents Paxos from issuing any more coins, driving more people to USDC, USDT, and TUSD.
BUSD Is Still Around
When Paxos was ordered to stop issuing the Binance USD stablecoin, people expected its supply to dwindle more quickly. However, users can still redeem BUSD for fiat currency, and all tokens will be burned. The slow trickle-down effect of reducing this supply has been ongoing. Last week, another $2.273 billion in BUSD was removed, further reducing its circulating supply. However, there is still close to $11 billion on the market today, ensuring it remains the third-largest pegged currency.
One would expect things to move in an exciting direction. When one of the biggest stablecoins drops, others will take its place. However, the “lost” BUSD supply isn’t fully flowing to other assets yet. Some of the liquidity ends up in USDT, USDC, or TUSD. However, those currencies have native supply and demand mechanics regardless of what happens to Binance USD.
With an inflow of $827 million, USDC has had a solid week. It continues to build strong momentum over its competitors. In addition, USDC has now surpassed a market cap of $42.1 billion, making it a more prominent asset. Curiously, it is also a stablecoin one cannot “use” on Binance. The exchange removed all USDC trading pairs several weeks ago and auto-converts balances to BUSD.
It is remarkable to see USDT note further growth. Valued at over $70.8 billion, it remains the go-to stablecoin in a somewhat competitive market. Although its growth slowed down, USDC is still far behind. Beyond those two, TUSD is the only pegged currency noting market cap growth this week. That is remarkable, as TrueUSD has hardly been mentioned in the past year or two. Its market cap hovers near $1.1 billion, overtaking FRAX.
What About The Rest?
There is a landscape of pegged currencies beyond BUSD, USDT, USDC, and TUSD. Demand for digital dollars hasn’t slowed down in the slightest. However, few currencies can note any growth beyond their current market cap. DAI, the native stablecoin of Ethereum, saw its supply decline by $55 million in a week. It still holds a combined value of $5.027 billion, confirming its overall success. However, algorithmic stablecoins have fallen out of favor since the collapse of UST.
Other currencies to watch include USDP, USDD, GUSD, and LUSD. However, the supply of USDD didn’t change, GUSD lost $1 million, and LUSD gained $2 million. On the other hand, USDP – issued by Paxos – had a $12 million market cap increase. Exciting developments, even if little changed for most projects.
The post BUSD Burning Continues As Market Cap Dips Below $11 Billion appeared first on CryptoMode.
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