The Paxos Is Prohibited From Printing The BUSD, Binance Is Starting To Switch To Stablecoin TUSD

The Binance crypto trading company is said to use TUSD stablecoin. (Photo; Doc. Cryptotendencias)

JAKARTA - The world's largest crypto exchange, Binance, has turned to alternative stablecoins after a crackdown on Paxos and Binance USD (BUSD). The US regulator's crackdown on the BUSD stablecoin forced Binance to rely on another stablecoin alternative, namely True USD (TUSD).

On February 16, Binance scored 50 million TUSD, according to blockchain investigators. TUSD was launched in 2018 and listed on Binance in May of that year. TUSD is the sixth largest stablecoin but its market share is less than 1 percent of the circulation of 973 million US dollars (Rp 14.8 trillion). Even so, TUSD's supply in circulation has increased 29 percent since the beginning of this year.

Last week, the publisher of BUSD Paxos was notified by the SEC, signaling regulators' intention to take law enforcement action. The company, which is regulated in New York, announced that it would stop printing BUSDs on February 21. There was a lot of redeeming following the news, and Binance is now starting to look for alternatives. The company stated that its stablecoins are fully supported and will remain supported.

However, Binance's decision to print TUSD has triggered a spike in the price of TRU, the DeFi token from the True Finance platform. TRU prices exploded more than 200 percent to reach an intraday high of 0.135 US dollars from a low of 0.044 US dollars. DeFi tokens are currently trading at 0.087 US dollars as FOMO fades and the market realizes that there is no relationship between TUSD and True Finance.

In addition, the trading volume for the token jumped from around $2 million to $250 million. TRU has been hit hard in the bearish market, like most other DeFi tokens. It is currently down 91 percent from an all-time high in August 2021 which is more than one dollar.

According to blockchain analytic firm Lookonchain, on-chain data shows that Alameda and Justin Sun are the two largest TUSD printers. Alameda scored a total of 1.64 billion TUSD in history, while Justin Sun scored a total of 889 million TUSD in history. Since regulators cracked down on BUSD, its market cap has decreased by 15 percent, or about 2.4 billion US dollars (equivalent to Rp36.4 trillion).

Prior to this week, BUSD was responsible for more than a third of the trading volume in Binance. Even though BUSD faces challenges, Binance still ensures that its stablecoins are fully supported and will remain supported. By switching to TUSD as an alternative, Binance hopes to meet customer demand that continues to rise and avoid legal issues.