With BUSD and USDC falling on the SEC’s target, Tether (USDT) is emerging as a clear winner. Stablecoin giant Tether has raised nearly $1 billion from its flagship token USDT following a regulatory crackdown against one of its rivals, BUSD.
Tether’s USDT raises another $1 billion as BUSD dies
Tether (USDT) has once again proven its dominance as the stablecoin of choice in the cryptocurrency market. According to data from CoinMarketCap, the token’s market cap started at $68.47 billion on Tuesday and then rose to $69.5 billion as of writing.
Meanwhile, BUSD, issued by Paxos, fell from $16.14 billion on Monday to almost the equivalent of $15.46 billion on Tuesday. Paxos, the company behind the token, has confirmed that it will stop issuing new units of the stablecoin starting next week, following orders from the New York Department of Financial Services (NYDFS).
Tether has captured half the market!
Stablecoins such as BUSD and USDT are cryptocurrencies whose value is pegged to the US dollar. Each is backed by billions of dollars in reserves, mostly cash and US treasury bills, but comes with the programmability and transferability of a crypto asset. Investors often trade against such tokens on CeFi and DeFi exchanges when buying other more volatile cryptos, making them the backbone of the crypto economy.
BUSD’s losses show those seeking stablecoin liquidity have fled to long-time king Tether to escape future regulatory pressures in the US. Unlike Paxos and Circle (the second largest stablecoin issuer), Tether is owned by Hong Kong-based company iFinex. Data from DeFiLlama shows that Tether’s latest gains push stablecoin market dominance to 50.77%, with the entire market valued at $136.93 billion.
Will Binance have a new move?
However, USDC can still profit from the decline of BUSD in the long run. Binance CEO Changpeng Zhao confirmed that his exchange will need to move away from the use of BUSD while consolidating stablecoin liquidity, possibly making room for USDC re-development. cryptocoin.comAs you follow, in September Binance started converting most major stablecoins, including USDC (but not USDT), to BUSD when deposited on the exchange. This meant that any USDC sent to Binance was effectively absorbed by the market cap of BUSD. This had a noticeable effect on the market dominance of each cryptocurrency.
Paxos was also sent a Wells notice by the SEC for allegedly issuing BUSD as an unregistered security. Circle’s Chief Strategy Officer Dante Disparte said on Tuesday that Circle has yet to receive a similar notification.
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