Crypto exchange giant Binance‘s BUSD stablecoin continues to lose market share after news such as mismanagement issues surfaced earlier this month.
According to CoinGecko, the circulating supply of BUSD fell to $15.4 billion on Wednesday, dropping $1 billion last week and $2 billion in a month.
The recent decline extended BUSD’s $22 billion decline in early December as worried users struggled to withdraw funds from Binance after it erred in a report on digital asset reserves.
BUSD is a dollar-pegged stablecoin issued by New York-based fintech firm Paxos Trust under the Binance brand, backed by cash and US Treasury bond reserves. Investors want to convert traditional fiat money into digital assets and cryptocurrency uses stablecoins as an intermediary to facilitate its trading.
The latest drop comes after recent reports of bugs involving wrapped token derivatives, known as the exchange’s Binance-backed tokens.
BUSD Not Always Fully Supported!
ChainArgos has proven that Binance-backed BUSD is not always fully backed by reserves in 2020 and 2021. Binance claimed to have already resolved the issues by admitting the breach. Bloomberg reported this week that the exchange is mixing client funds with collateral for Binance-backed tokens.
Finally, Binance’s banking partner, Signature Bank, announced that it will stop transfers under $100,000 using the SWIFT interbank messaging system from February 1. This was interpreted as very negative news for retail investors.
According to data from DefiLlama, BUSD lost 11.3% of market cap in a month, while USDT gained 1.3% and USDC fell just 1.9%. Still, BUSD is in the top three that has increased its market value over the past year. stablecoinonly one of .
CryptoCompare, on the other hand, measured the total market cap of my stablecoins at $137 billion. This means that there has been a decrease in value for the last 10 months.