The Binance stablecoin BUSD, branded by Paxos and issued in response to an alarming Wells Notice from the SEC has fallen down on market capitalization leaderboards. It now ranks ninth.
BUSD now has a lower value than Cardano, a prominent blockchain. Dollar-pegged token polygon (MATIC), that powers Layer-2 Ethereum’s network with the same name is jostling for eighth place.
The TIE reports that MATIC has been able to flip BUSD multiple times in the last few days. However, at time of publication, MATIC had $65 millions more than BUSD.
BUSD’s position could be jeopardized if MATIC drops even a little bit from this point.
BUSD’s circulating stock has dropped by about 20% since the first reports on SEC intent to sue surfaced in February.
SEC regulators informed Paxos, based in New York that BUSD is a security and should have been registered prior to being sold US investors.
Paxos announced that it was halting all token sales, effectively stopping the sale of new BUSD. It also announced that it was cutting ties with Binance and leaving BUSD in the limbo.
As much as $23.5 Billion in BUSD circulated the crypto-ecosystem at its peak mid-November, when crypto exchange FTX blew. The figure is $12.8billion.
Blockworks’ analysis of blockchain data shows that Paxos burned nearly $3.5 billion USD over the course of this time period. This indicates they have redeemed a similar amount in US dollars.
BUSD still ranks third in stablecoins by market cap, just behind USDT (USDT) & USDC (USDC), with respective values of $70.4bn and $41.9bn. DAI (the decentralized stablecoin managed by MakerDAO) is in fourth place with around $5.2 billion.
Which cryptocurrencies are likely to be next in line to make BUSD go up? Paxos, if the prices stay flat, would have to further reduce BUSD’s supply to $1.11 Billion to put it at risk of being overtaken by dogecoin.
Solana (SOL) would have to burn an additional $1.84 Billion to surpass it.
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