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- A decline of 29% has been observed, dropping from a market value of $5.54B on May 18 to the current $4.3B.
- Tether (USDT) remains at the forefront while other stablecoins experience a downturn.
According to data from CoinMarketCap, the U.S. dollar-pegged BUSD stablecoin has fallen to the fourth position in market capitalization among stablecoins, having lost over $1 billion in the past month.
The market value of BUSD has decreased by 29%, from $5.54B on May 18 to its current valuation of $4.3B. Since reaching a peak of over $23 billion in December 2022, the stablecoin has been on a downward trend.
Impact of SEC Actions
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Following the significant collapse of FTX in November 2022, substantial changes have taken place regarding Binance, coinciding with the decline in BUSD’s market value. A net withdrawal of $3.6 billion occurred within a week after a December 2022 report suggested that the U.S. Department of Justice might take action against Binance. Market makers redeemed large quantities of BUSD from the exchange, with Jump Finance alone accounting for over $245 million.
The BUSD stablecoin was introduced in September 2019 through a partnership between Binance and Paxos Trust. While Paxos issues and owns the stablecoin, Binance holds a license to utilize its name.
Paxos encountered additional challenges due to this partnership. In February, the U.S. Securities and Exchange Commission reportedly issued a Wells notice to the company, claiming that BUSD constituted an unregistered security.
Following an investigation, New York’s Department of Financial Services instructed Paxos to cease BUSD issuance. Consequently, BUSD’s market share fell from $15.88 billion on February 12 to $8.38 billion by March 13.
The SEC’s lawsuit against Binance for allegedly promoting unregistered securities on June 5 represented another setback. Among the 13 allegations made by the U.S. regulator against the exchange are claims regarding unregistered offers and sales of BNB and BUSD tokens.
Over the past year, there have been notable changes in the market share of U.S. dollar-linked stablecoins, with Tether achieving a new all-time high, even as the market capitalization of other stablecoins declined.
