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TrueUSD (TUSD) has risen to become the fifth largest stablecoin by market capitalization after Binance adopted the token as its preferred dollar-pegged cryptocurrency in late February.
Last week, the BTC/TUSD trading pair exceeded 50% of Binance’s Bitcoin trading volume, surpassing BTC/USDT.
Is TUSD Tether’s Next Competitor?
As per an analysis from crypto market data provider Kaiko on Monday, BTC/TUSD emerged as the leading Bitcoin market on Binance last week, following a period of significant dominance by BTC/USDT as recently as last month.
USDT was introduced by Tether in 2014 as one of the pioneering dollar-pegged stablecoins and continues to be the largest of such tokens by market capitalization today. With a valuation exceeding $80 billion as of April 2023, it maintains its dollar peg through liquid reserves consisting of both cash and short-term US Treasury bills.
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USDT gained considerable traction against Circle’s USDC, one of its main rivals, when Binance replaced the latter cryptocurrency with BUSD at its exchange in September. Tether’s market capitalization was further bolstered after USDC temporarily lost its dollar peg during the Silicon Valley Bank crisis in March.
However, the situation changed when BUSD issuer Paxos was compelled by US regulators to start winding down operations in February. In an effort to reduce its reliance on BUSD, Binance swiftly began minting tens of millions of dollars in TUSD. As of April 17, TUSD’s market cap stands at over $2 billion, compared to approximately $966 million on February 27.
TrueUSD functions similarly to Tether, holding over $2.15 billion in bank reserves to support its token. In collaboration with Chainlink, the company employs a real-time proof of reserves system to cryptographically confirm that its stablecoin is consistently fully backed.
Binance’s Transition to TUSD
By late March, Binance had introduced a variety of new TUSD trading pairs, including LDO/TUSD, MATIC/TUSD, OP/TUSD, SOL/TUSD, SSV/TUSD, and XRP/TUSD. It also designated TUSD as the exclusive stablecoin to benefit from its zero-fee BTC trading fee policy after March 22 – the exact moment when BTC/TUSD volume on Binance began to surpass other Bitcoin pairs.
TrueUSD’s total volume over 24 hours as of April 17 is $226 million. In contrast, USDT’s daily volume exceeds that of any other cryptocurrency, reaching $31.5 billion.
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