Over $2B BUSD burnt in the last seven days News ▸ New York ▸ Binance ▸ Stablecoins
Over $2B BUSD burnt in the last seven days
Binance-backed BUSD has seen its supply shrink by around $5 billion as regulators ramp up their scrutiny of the stablecoin.
2 min read
Updated: Feb. 27, 2023 at 9:07 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Binance USD’s (BUSD) supply shrank by 18.2% — roughly $2.27 billion — over the last seven days to $10.84 billion, according to CryptoSlate’s data.
The massive redemptions have seen the stablecoin drop out of the top 10 cryptocurrencies by market cap, according to CoinGecko.
During this period, Binance burnt $2 billion idle BUSD on the BNB Chain on Feb. 22 — releasing the BUSD collateral on the Ethereum (ETH) chain.
Since BUSD issuer Paxos was ordered to stop other mints of the stablecoin on Feb. 13 by the New York Department of Financial Services (NYDFS), BUSD has seen its supply tank by around $5 billion.
Following the news, blockchain analytical firm Santiment reported that BUSD whales were rapidly dumping the tokens.
The stablecoin also briefly traded at a discount against USDT on Feb. 23, according to Kaiko data. Besides that, BUSD reportedly dropped to a low of $0.20 against the DAI stablecoin on Feb. 22 as liquidity for the stablecoin fell.
Stablecoins rival profit
Meanwhile, BUSD’s market cap decline has profited rival stablecoins like Circle’s USD Coin, Tether’s USDT, and TrueUSD (TUSD) — which all recorded gains in the last seven days.
USDC’s market cap increased by $827 million, while TUSD rose by $131 million and USDT by $466 million, according to CryptoSlate data.
Binance CEO Changpeng Zhao (CZ) noted that the stablecoin “landscape is shifting.” USDT was the major winner because its market cap was rising, according to CZ. USDT dominance rose to its highest level since May 2022 following the events.
However, the little-known TUSD stablecoin has also recently begun to see adoption. Dormant TUSD coins were moving to exchanges, and its crypto exchanges supply reached 73% for the first time since June 2021, Santiment said.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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BUSD is a stablecoin issued by Paxos in partnership with Binance..
Tether
$1.00054
Launched in 2014, Tether is a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner.
USD Coin
$1.00012
USD Coin (USDC) is a stablecoin fully backed by the US dollar and developed by the CENTRE consortium.
Binance
Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies.
Paxos
Paxos Trust Company, LLC is a regulated blockchain infrastructure company building transparent and transformative financial solutions.
