On the 17th of February 2023, Changpeng Zhao, CEO of the leading crypto exchange, Binance, posted a tweet acknowledging the growing strength of USDT.
BUSD market cap dropped -$2.45B (from 16.1B to 13.7B as of now), and most of it has moved to USDT.
USDT marketcap + 2.37B (From 67.8B to 70.1B)
USDC also declined -739M (from 42.3B to 41.5B)
Landscape is shifting.
(Note: BUSD is NOT issued by Binance.) pic.twitter.com/kVrZUYjuOh
— CZ 🔶 Binance (@cz_binance) February 17, 2023
He tweeted that the BUSD market capitalization has dropped by $2.45B from $16.1 billion to $13.7 billion adding that most of it had been moved to USDT.
Attached to the tweet posted by CZ is a chart that showed the USDT market cap also increased by 2.37 billion, From 67.8 billion to 70.1 billion. while the USDC market cap declined by 739 million, from 42.3 billion to 41.5 billion. He also mentioned that BUSD is not issued by Binance, as many still believe it’s issued by Binance. CZ further added that the landscape is shifting.
According to CoinGecko data, USDT as Stablecoin’s giant Tether flagship token records some $69 billion outstanding, followed by USDC at $41 billion. USDT, grew by nearly $1 billion in the aftermath of a regulatory crackdown against one of its rivals, BUSD. The token’s market cap started at $68.47 billion on Tuesday, before rocketing upwards to roughly $69.23 billion, according to data from CoinMarketCap.
The Paxos Trust Company, the firm behind Binance USD, was instructed to halt the production of tokens by the New York Department of Financial Services, causing the Paxos-issued BUSD to continue to experience a nearly equivalent decline from $16.14 billion on Monday to $15.46 billion on Tuesday. And the subsequent decline is expected if the situation develops negatively for Paxos.
BUSD’s losses may show that those seeking stablecoin liquidity are fleeing to the longtime king, Tether, to escape future regulatory crackdowns in the US as Tether is owned by the Hong Kong-based company, iFinex.
New York’s action against Paxos opens a fresh chapter in the constant rivalry for dominance in the stablecoin market. By maintaining a fixed price, usually pegged to the U.S. dollar, the tokens are essential to facilitate trading digital assets on exchanges and transfer value between traditional fiat money and cryptocurrencies.
Leena ElDeeb, research associate of digital asset firm 21.co stated in an email that the current headwind will lead to a consolidation in the stablecoin market towards blue chips such as Tether and USDC, and the winner will most likely be Tether, as millions of dollars of inflows to USDT on Binance is being witnessed.
