The world of stablecoins is suddenly looking shaky. Seismic shifts may be afoot in the $137 billion market after New York-based Paxos Trust Company, which mints Binance's stablecoin, said it would cease issuing new BUSD tokens after U.S. regulators labeled the asset an unregistered security.The
Seismic shifts may be afoot in the $137 billion market after New York-based Paxos Trust Company, which mints Binance's stablecoin, said it would cease issuing new BUSD tokens after U.S. regulators labeled the asset an unregistered security.
"There's way too much demand for dollar-based stablecoins for them to go away," said Alex Miller, CEO at bitcoin developer network Hiro. Circle's USD Coin, the second-biggest stablecoin, edged up over $700 million to $42 billion, lifting its market share to 31.3 per cent from 30.9 per cent.Stablecoins are a key part of the cryptosphere, with their steadier value meaning they're used as to facilitate transfers between cryptocurrencies or into regular cash. Traders also use these tokens to hedge their positions, and hence dwindling market value is associated with falling liquidity and leverage in the broader crypto market.
"While BUSD is used in DeFi, it is not systemically important to the ecosystem," Kaiko's Riyad Carey said.The developments around Binance's stablecoin have also boosted trading on competing platforms; since Feb. 1, Binance's bitcoin liquidity is down almost 30 per cent while U.S.-based Coinbase's is up nearly 15 per cent, according to Kaiko.
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