Binance USD (BUSD) Supply Increases as Stablecoin Wars Gain Intensity
BUSD, the third-largest stablecoin by market share has experienced an increase in supply as it competes with the top two stablecoins.
Binance has begun changing its USDC holdings into its own stablecoin, BUSD. Frank Chaparro of The Block saw the supply shift on October 23, when the number of BUSD surpassed $20 billion for the first time ever.
According to CoinGecko, its current supply is at a record-breaking $21.7 billion. This accounts for around 15% of the overall stablecoin market capitalization of $147 billion.
Until now this month, 22% of all transactions have been conducted in BUSD, he noted. Binance stated in September that current balances and new deposits of USDC, USDP, and TUSD will be converted to BUSD.
Sam Bankman-Fried, the crypto millionaire and CEO of FTX, said that the transfer from USDC to BUSD began the “Second Great Stablecoin War.”
He noted that the first one occurred in 2018, with USDT and USDC prevailing over TUSD, GUSD, and USDP.
SBF proceeded by noting that the difference this time is the presence of positive interest rates, which increases stablecoins’ income. “It will be fascinating to watch what emerges from the non-fiat-backed stablecoin market post-Luna and post-DAI holding USDC,” he said, adding that it will be “something yielding interest or otherwise with upside.”
Tether’s USDT is currently the biggest stablecoin by market value, but its market share has diminished lately as regulatory worries increase and institutions turn to competitor Circle’s USDC.
Three of the top ten crypto assets by market capitalization are stablecoins with a total market worth of $134 billion, which is close to Ethereum’s market size.
In the United States, stablecoin laws are still a long way off. Despite the Biden administration’s need for a little more urgency, Congress looks to be in no hurry to solve the concerns.
Last Monday, Congressman Jim Himes said, in relation to the long-awaited crypto rules, “It’s probably not going to happen in early 2023.”
Stablecoins presently account for 15% of the overall crypto market capitalization, which rose 1.7% to $975 billion on the day.
During the Asian trading session on Monday morning, the main cryptocurrencies began to move, with Bitcoin rising 1.3% on the day to surpass $19,600 and Ethereum gaining 3.5% to surpass $1,360.