Binance’s BUSD Stablecoin Market Share Drops as Investors Flee to TUSD
The stablecoin market has been shaken up in recent weeks as Binance’s BUSD stablecoin faces delistings and a drop in market share. On February 13, Paxos Trust, the operator of BUSD, announced that it would stop minting the Binance-branded stablecoin following news that the SEC intended to sue Paxos for violating investor protection laws.
Coinbase also announced that it would suspend trading for BUSD within the month, leading to a mass exodus of investors from the asset. The market capitalization of BUSD has plummeted from roughly $16 billion on February 13 to roughly $9 billion today, marking a 43% loss, according to CoinGecko.
As BUSD holders opt out of the troubled stablecoin, they are turning to other options, including TrueUSD (TUSD). TUSD has seen a surge in demand in recent weeks, with its market capitalization rising from roughly $1.5 billion on February 13 to roughly $2.5 billion today, according to CoinGecko.
The shift in market share highlights the importance of trust and regulatory compliance in the stablecoin market. As regulators crack down on non-compliant stablecoins, investors are flocking to more established and regulated options like TUSD.
It remains to be seen how the stablecoin market will evolve in the coming weeks and months, but one thing is clear: the days of unregulated stablecoins may be numbered. As investors demand greater transparency and regulatory compliance, stablecoin operators will need to adapt or risk being left behind.
