Dollar-pegged Binance USD (BUSD) stablecoin now ranks fourth in market capitalization among other stablecoins after dropping more than $1 billion in the past 30 days, data from CoinMarketCap shows.
At the time of writing, BUSD’s market cap is $4.30 billion, down 29% from $5.54 billion on May 18. The stablecoin has been on a downward trend since December last year, when its market capitalization exceeded $23 billion.
The decline in BUSD market cap parallels major developments surrounding Binance following the dramatic collapse of FTX in November 2022. Last December, a report suggested that Binance would be targeted by the US Department of Justice. resulted in net withdrawals of $3.6 billion within seven days. The exchange saw large purchases of BUSD by market makers, including over $245 million from Jump Finance.
A partnership between Binance and Paxos Trust created the BUSD stablecoin in September 2019. Paxos issues and owns the product, while Binance licenses its brand. For Paxos, the partnership brought new challenges. In February, the company was allegedly gave notice to Wells from the US Securities and Exchange Commission alleging that Binance USD was an unregistered security.
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The investigation led the New York Department of Financial Services (NYDFS) to order Paxos stop issuing BUSD. Together, these episodes took a significant bite out of BUSD’s market share, from $15.88 billion on February 12th to $8.38 billion on March 13th.
The latest blow came from the SEC’s June 5 lawsuit against Binance for allegedly offering unregistered securities. American regulator brought 13 charges against the exchangeincluding unregistered offers and sales of BNB and BUSD tokens.
Market dominance of stablecoins pegged to the US dollar has undergone several changes over the past yearwith Tether (USDT) is climbing back to its all-time high, while most stablecoins are falling.
Circle’s USD Coin (USDC(DAI) crypto market share was at 3.66%, down from 4.05% in May 2022.
Tether’s USDT, on the other hand, is gaining momentum. The stablecoin’s market dominance in May was 65.89%, up from 47.04% a year ago. Its market cap rose to $83.1 billion, while USDC’s market cap fell from a peak of $55 billion to $29 billion.
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