The stablecoin market has witnessed a major shift as TUSD, a fiat-backed token issued by TrustToken, has overtaken BUSD, a similar token issued by Paxos in partnership with Binance, in terms of market supply. This is the first time that TUSD has surpassed BUSD since the latter’s launch in 2019.
TUSD Moves Ahead of BUSD for the First Time Since Launch
According to data from CoinGecko, TUSD’s market cap has reached over $3.4 billion as of September 5, 2023, while BUSD’s market cap has dropped to $2.8 billion. TUSD’s supply has increased by 15.6% in the past three days, while BUSD’s supply has declined without new minting.
The reason behind this change is the regulatory pressure that Binance and Paxos are facing from the U.S. authorities. Paxos, which is licensed by the New York State Department of Financial Services (NYDFS), has reportedly stopped issuing new BUSD tokens since July 2023, following a cease and desist order from the NYDFS.
Binance, on the other hand, has been under scrutiny from various regulators around the world for its lack of compliance with local laws and regulations. Binance has also discontinued its support for BUSD on its platform, making it harder for users to access and trade the token.
Meanwhile, TUSD has gained popularity and adoption on Binance, as the exchange has introduced new trading pairs and staking options for the token through its Launchpool program. TUSD has also benefited from its reputation as a transparent and audited stablecoin that complies with U.S. regulations.
The situation shows how the stablecoin market is influenced by external factors beyond the control of the token issuers and users. BUSD, which was once the dominant stablecoin on Binance, has lost its edge due to its issuer’s legal issues.
TUSD, which was once overshadowed by BUSD, has seized the opportunity to become the top stablecoin on the world’s largest cryptocurrency exchange.