BUSD Stablecoin Circulating In Market Are Shrinking, Impact Of SEC Ban?

After SEC banned Paxos from printing new coins, BUSD stablecoin was reduced from circulation. (Photo; Doc. Cryptonaute)

JAKARTA - Binance's Stablecoin BUSD has had a rocky ride since Paxos received the Wells Notice from the SEC. Paxos notes that since its decision to stop printing cryptocurrencies, more than 2.8 billion US dollars (IDR 42.5 trillion) BUSD exchanges have been made without significant disruption to the market.

According to Blockworks reviewing the blockchain data, as of 11:00 a.m. ET on Friday, approximately US$4.892 billion (worth IDR 74.3 trillion) in BUSD had been burned since the notification was issued, an average of US$407.7 million (6.2 trillion) every day.

The circulating supply of BUSD has also shrunk by 26 percent following the SEC investigation, with around $11.4 billion (IDR 174 trillion) of BUSD circulating on the market today, nearly half of the total circulating supply at its peak last November.

The dollar benchmark of BUSD has also seen a shake-up in certain markets, hitting $0.99 earlier this week, according to CoinGecko. However, despite its sharp drop in market cap, BUSD is still the third largest stablecoin.

Paxos said that they will continue to support BUSD until at least February next year "and maintain the highest standards of security and soundness in the stablecoin market."

The head of research at CoinGecko, Zhong Yang Chan, said that in the long term, the events that occurred at Binance could motivate the industry to continue innovating towards decentralized stablecoins. Several new stablecoins like GHO from Aave and crvUSD from Curve are getting ready to launch in the market.