BUSD's market capitalization has plummeted by nearly $14 billion from its all-time peak of $23.49 billion, which was set on November 15th, 2022.
Binance Due to a planned delisting from a large cryptocurrency exchange and a regulatory crackdown on its token issuer in the US, USD's market cap has dropped to its lowest level in almost two years, falling below $10 billion.
Since its all-time high market cap of $23.49 billion on November 15, BUSD's market cap has been in a steady decline, and as of March 3, it has reached a new low of $9.66 billion - a level not seen since June 29, 2021.
On February 12th, the United States Securities and Exchange Commission (SEC) filed a potential lawsuit against Paxos, the issuer of BUSD, for a possible violation of investor protection laws. This news caused a significant drop in BUSD's market cap, with $6.65 billion being shaved off.
In addition, the New York District of Financial Services ordered Paxos to stop minting and issuing BUSD, which likely contributed to the stablecoin's market cap decline.
In response to the controversy, Coinbase announced that it would be delisting BUSD from its exchange on March 13th, citing that the stablecoin "no longer met our listing standards".
This news came amidst a wider crypto market downturn, with many attributing the market's decline to Silvergate Bank's late filing of its annual 10-K financial report on March 1st.
The Binance-branded stablecoin, which ranks third in terms of market cap behind Tether and USD Coin, rapidly gained traction after its September 2019 launch. This meteoric rise to prominence has seen it become the tenth largest cryptocurrency by market capitalization, with Solana following closely behind at $7.98 billion.
This impressive feat is a testament to the trust and confidence that the crypto community has placed in the Binance stablecoin.
Interestingly, Binance CEO Changpeng "CZ" Zhao revealed during a Feb. 14 Twitter Spaces event that he had initially been sceptical of the Binance stablecoin project, admitting that he had thought it "may fail" when it was first launched.
To explain the decrease in demand for BUSD, Binance recently issued approximately $50 million worth of TrueUSD (TUSD) in an effort to diversify its stablecoin portfolio. This move demonstrates Binance's commitment to providing its users with a wide range of options for their digital asset needs.
Also, read - Trezor Issues Scam Alert for New Phishing Attack