Following Coinbase’s Delisting Binance USD Stablecoin Market Cap Drops Below $10 Billion

According to data, the market capitalization of Binance USD, the Paxos-issued stablecoin operating under the name of the largest cryptocurrency exchange by trading volume in the world, dropped to $9.5 billion on Friday. Since June 2021, this is the first time the circulating supply of BUSD has fallen below $10 billion.

Following Coinbase’s Delisting Binance USD Stablecoin Market Cap Drops Below $10 Billion

When Paxos declared on February 13 that it would halt issuing new BUSD tokens, citing directives from state regulator New York Department of Financial Services (NYDFS), demand for BUSD has been sharply falling. Separately, it was claimed that Paxos would be sued by the U.S. Securities and Exchange Commission (SEC) for distributing unregistered securities.

Around $6.7 billion in BUSD have been redeemed from Paxos by investors since February 13, according to blockchain data from crypto intelligence company Nansen. Dogecoin (DOGE), now the ninth-largest cryptocurrency by market capitalization, has replaced BUSD as a result of the decline in demand, according to CoinMarketCap.

Concerns About BUSD Liquidity

The largest cryptocurrency exchange in the United States, Coinbase, revealed this week that it would stop allowing BUSD trades on its platform starting on March 13. In order to delist the stablecoin, Coinbase CEO Brian Armstrong claimed liquidity issues.

According to data from Kaiko, the daily trading volume for BUSD on Coinbase in the last two months was just around $9 million, and the market depth within 2% of the market price was only approximately $600,000, leaving the stablecoin’s price susceptible to fluctuations.

On the other hand, the major market for the stablecoin, Binance, saw a dramatic decline in BUSD liquidity last month. According to Kaiko data, the market depth within 2% for the stablecoin pairs BUSD-USDT and BUSD-DAI has decreased to $123 million from $200 million in February before the Paxos announcement.


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