Dear clients,
The $137 billion market could see shifts after New York-based Paxos Trust Company, which issues the Binance stablecoin, said it would stop issuing new BUSD tokens after US regulators designated the asset as a non-registered security.
However, the immediate effect was not negative for the stablecoin market as a whole; in fact, its total value has risen by $2 billion since February 13.
Instead, competitors are trying to capitalize on the woes of BUSD, the world’s third-largest stablecoin, whose market value has shrunk from $16.1 billion to $12.9 billion and its market share has fallen from 12.1% to 9.4%, according to CoinGecko.com.
Market leader Tether (USDT) has won the most, increasing its market capitalization by $1.9 billion to reach $70.3 billion since the announcement. Now it controls 52.6% of the stablecoin market from just over 51%.
USD Coin, the second largest stablecoin, rose over $700 million to $42 billion, boosting its market share to 31.3%.
Stablecoins are a key part of the cryptosphere, and their more stable value allows them to be used to facilitate transfers between cryptocurrencies or fiat money. Traders also use these tokens to hedge their positions and hence the decline in market value is due to the drop in liquidity and leverage in the broader crypto market.
