According to CoinMarketCap, Binance USD (BUSD) stablecoin’s market capitalization has fallen over $1 billion in the past 30 days, causing it to drop to the fourth position among stablecoins. BUSD’s current market cap is $4.3 billion, down 29% from May 18th when it was worth $5.54 billion. The decline in BUSD’s market cap can be attributed to major events surrounding Binance, such as the U.S. Department of Justice targeting them and the SEC lawsuit against Binance for allegedly offering unregistered securities. This follows a downward trend since December 2020 when BUSD had a market cap of $23 billion.
BUSD was created through a partnership between Paxos Trust and Binance
BUSD was created through a partnership between Paxos Trust and Binance in September 2019, with Paxos issuing and owning the product while Binance licenses its brand. However, in February 2022, the NYDFS ordered Paxos to stop the issuance of BUSD after being served a Wells Notice by the SEC alleging that BUSD was an unregistered security. These episodes have collectively taken a significant bite out of BUSD’s market share, with its participation dropping from 11.68% to 4.18% in the same period, while Tether’s USDT has gained traction with a market dominance of 65.89%.
Changes in Market Dominance of Stablecoins Pegged to the U.S. Dollar
Overall, the market dominance of stablecoins pegged to the U.S. dollar has seen changes over the past year, with Tether (USDT) climbing back to its all-time high, while most stablecoins are declining. Circle’s USD Coin (USDC) and Dai’s (DAI) market shares have also declined, while Tether’s market capitalization has risen to $83.1 billion.