This amount of money could have been used to fund countless projects, create jobs, and improve the lives of many people. Instead, it has been lost in a matter of days, leaving a devastating impact on the global economy.
Binance-backed BUSD has witnessed a significant decrease in its supply, with a staggering $5 billion being withdrawn as regulators intensify their oversight of the stablecoin. This is indicative of the growing demand for a reliable and secure form of digital currency, as well as the increasing need for regulatory compliance.
Binance USD's (BUSD) supply has plummeted by 18.2%, amounting to a staggering $2.27 billion, in the past seven days, according to CryptoSlate's data. This has caused the stablecoin to drop out of the top 10 cryptocurrencies by market cap, as reported by CoinGecko.
On Feb. 22, Binance burned $2 billion worth of idle BUSD on the BNB Chain, releasing the BUSD collateral on the Ethereum (ETH) chain. This, combined with the New York Department of Financial Services (NYDFS) ordering Paxos, the issuer of BUSD, to stop minting the stablecoin on Feb. 13, has caused the supply of BUSD to decrease by around $5 billion.
In response to this news, blockchain analytical firm Santiment reported that BUSD whales were rapidly dumping the tokens. Additionally, Kaiko data revealed that BUSD briefly traded at a discount against USDT on Feb. 23, and even dropped to a low of $0.20 against the DAI stablecoin on Feb. 22 as liquidity for the stablecoin dwindled.
Meanwhile, Binance USD's (BUSD) declining market capitalization has been a boon for rival stablecoins such as Circle's USDC, Tether's USDT, and TrueUSD (TUSD), all of which have seen gains in the past seven days. CryptoSlate data shows that USDC's market cap increased by $827 million, TUSD rose by $131 million, and USDT by $466 million.
Binance CEO Changpeng Zhao (CZ) commented that the stablecoin landscape is undergoing a transformation, with USDT emerging as the major winner due to its increasing market capitalization. USDT's dominance reached its highest level since May 2022 following these events.
However, the lesser-known TUSD stablecoin has recently seen a surge in adoption. Recently, dormant TUSD coins have been transferred to exchanges, and its crypto exchange supply has reached 73% for the first time since June 2021, according to Santiment. This is a remarkable milestone for the TUSD stablecoin, as it continues to gain traction in the crypto market.
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