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Binance CEO Highlights Shifts in Stablecoin Market

Changpeng Zhao discusses the decline of BUSD and USDC, and the growth of USDT in the stablecoin market.
Published on 2023-03-21

Binance USD (BUSD) Winding Down

Changpeng Zhao, the CEO of Binance, recently addressed the winding down of Binance USD (BUSD) despite its status as a highly regulated and fiat-backed stablecoin. BUSD, issued by Paxos Trust Company, was regulated by the New York Department of Financial Services (NYDFS) and underwent audits by prominent firms. Nevertheless, Paxos was instructed to cease issuing BUSD, leading to a halt in new minting.

USDT's Market Cap Growth

In contrast to BUSD's decline, Tether USD (USDT), the world's largest stablecoin, has seen its market capitalization rise by over 9% since BUSD's minting suspension on February 21. USDT's market cap now stands at an impressive $77 billion, underscoring its dominance in the stablecoin sector.

Impact on USD Coin (USDC)

The stablecoin market has been volatile, with USD Coin (USDC) also experiencing challenges. Following the collapse of Silicon Valley Bank, USDC temporarily lost its peg to the US Dollar, dropping to 90 cents. The banking sector's turmoil has contributed to a decrease in USDC's market cap by more than 18% since March 10.

Industry Implications

These developments highlight significant shifts within the stablecoin market. BUSD's market cap has shrunk by over 37%, now at $8.1 billion. Meanwhile, USDT's growth amidst these changes illustrates its resilience and adaptability. As the crypto landscape evolves, the stability and regulatory status of stablecoins remain critical factors influencing their market performance.

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