The Stablecoin Tussle: BUSD’s Market Cap Drops to $9.6B
Recent data shows that BUSD is displaying a downward trend in terms of its market value. Essentially, the coin’s market cap is dipping below the $10B mark. This change comes after BUSD attained a market cap of $23B in November 2022.
A Dwindling Market Cap
At the time of writing, BUSD has a market cap of $9.6B and is changing hands at $0.99. The figure represents a 0.03% drop in the last 24 hours. The coin’s market share also decreased from 20% in 2022 to 7.3% in 2023.
Despite the downward trajectory, Binance’s CEO said BUSD’s negative performance was expected. According to CZ, BUSD wasn’t a high-priority project, and he was prepared for its downfall. He added that users are shifting their attention to USDT since the coin’s market cap moved from $67B to $70.1B in mid-February 2023.
SEC Goes After Paxos
The Securities and Exchange Commission served Paxos Trust with a Wells Notice on February 13th, 2023. This Notice represents a regulator’s letter that alerts companies about a planned lawsuit. In the Notice, the SEC claims that Paxos Trust is issuing unregistered securities like Binance USD. The watchdog considers this activity illegal since it goes against investor protection policies.
Binance exchange, however, distanced itself from the brewing battle between Paxos and SEC. According to the exchange, BUSD is only affiliated with Binance through partnership. This fact means Paxos is in charge of BUSD since it’s the primary issuer.
The New York Department of Financial Services (NYDFS) also enforced new orders on Paxos. The regulator advised Paxos to halt BUSD issuance due to the blockchain’s relationship with Binance. This action began to take effect moments after the SEC served Paxos with a Wells Notice.
The Paxos lawsuit is a big contributor to BUSD’s recent performance. Overall, BUSD’s market cap lost close to $6B since the enforcement action plan began to surface.
Coinbase Delists BUSD
On February 27, 2023, Coinbase announced it would discontinue BUSD trading on its platform. The exchange said BUSD doesn’t meet its listing criteria as the platform conducts frequent reviews on its assets. Hence, from its previous reviews, Coinbase concluded that BUSD would no longer be available on the exchange from March 13th, 2023.
Key observers believe that Coinbase’s decision is based on the fact that Paxos could face legal action. That way, removing BUSD from the platform will help Coinabse avoid legal confrontation with the regulators for supporting BUSD’s trade.
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