BUSD, the USD-based stablecoin of the world’s largest centralized cryptocurrency exchange Binance, has reached net redemption of $ 5.5 billion.
Rival Stablecoins Are Rising
Binance has made great efforts to promote its stablecoin, BUSD, over the past year and to put it ahead of its competitors. Unfortunately, due to the FTX fiasco and some events involving Binance, trust in centralized exchanges has decreased.
According to data from Coingecko, the market cap of BUSD dropped from $22.1 billion at the beginning of December 2022 to $16.4 billion, the lowest level in 2022. Despite these data, BUSD maintains its 3rd place in the ranking of the largest stablecoins by market value, while BUSD continues to assert itself against its competitors.
Pegged BUSD
BUSD is issued by Paxos Trust Company on behalf of Binance and pegged to USD. The biggest competitors in Binance’s stablecoin plan are Tether’s USDT and Circle’s USDC stablecoins. The purpose of such stablecoins is to facilitate the conversion and trading of fiat currencies into crypto.
Binance has announced in recent months that some of the stablecoins on its exchange will be automatically converted to BUSD. After Binance’s move, BUSD’s valuation of 18 billion dollars increased to 23 billion dollars over time. But the report on crypto reserves by audit firm Mazars, and the FTX crash in November, left users worried and forced to withdraw.
2022 Stablecoin Wars
After the setback experienced by BUSD, the valuation of rival stablecoins increased. According to data from Coingecko, after the decline of BUSD, the total market capitalization of USDT increased by about $ 800 million to $ 66.3 billion, while the value of USDC, another competing stablecoin, increased by $ 1 billion to $ 65.5 billion. In addition, in 2022, the BUSD market value increased by 20% and the USDC market value increased by 4%, while the USDT market value decreased by 15%.
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