Binance-backed BUSD circulating supply drops to less than $3B
Binance has been urging its users to use alternative stablecoins with BUSD's demise now imminent.
The circulating supply of Binance USD (BUSD) has fallen to $2.8 billion, marking its lowest point since early 2021, when the stablecoin was still relatively new to the crypto market, according to CryptoSlate’s data.
The Binance-backed stablecoin has seen its market share rapidly decline this year after it was labeled securities by the U.S. Securities and Exchange Commission (SEC) in its legal actions against the exchange. Besides that, BUSD issuer Paxos was forced to stop other mints of the asset by the New York Department of Financial Services. Binance and Paxos vehemently rejected this SEC classification.
While Binance has committed to maintaining support for the stablecoin until its complete phase-out, regulatory actions have prompted a swift exodus from the troubled stablecoin within the crypto community, causing its circulating supply to dwindle to under $3 billion from a peak exceeding $20 billion last year.
Binance push alternatives
With BUSD certain to end by next year, Binance has pushed several stablecoin alternatives to its users.
Last week, the firm recommended that its users convert their BUSD into First Digital USD (FDUSD), a stablecoin issued by Hong Kong-based First Digital Group and launched in late July.
Following the announcement, FDUSD’s market supply has surged to a record-breaking $382 million. Nonetheless, the stablecoin’s adoption remains constrained, as it has only been listed on Binance, lacking presence on other major crypto platforms.
Before FDUSD, Binance also heavily marketed Justin Sun-linked True USD (TUSD). TUSD is the fastest-growing stablecoin of this year, with its market capitalization growing to more than $3.4 billion primarily due to the early support it enjoyed from Binance.
However, the stablecoin has come under heavy fire from the crypto community over its alleged links with Tron’s network founder, Justin Sun, and its “exposure” to bankrupt Nevada-based crypto custodial firm Prime Trust.