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Binance USD Stablecoin Market Cap Drops Below $10 Billion After Coinbase Delisting

Binance USD, a stablecoin issued by Paxos that is named as the world’s largest crypto exchange by trading volume, fell to $9.5 billion in market capitalization on Friday, according to data from CoinGecko.
This is the first time that BUSD’s distribution has fallen below $10 billion since June 2021. Demand for BUSD has declined rapidly since Paxos announced on February 13 that it will stop issuing new BUSD tokens, citing orders from the New York State Department of Financial Services (NYDFS). Separately, the US Securities and Exchange Commission (SEC) is preparing to sue Paxos for offering unregistered securities.

Blockchain data from crypto intelligence firm Nansen shows that investors have withdrawn BUSD worth $6.7 billion from Paxos since February 1. 13.
Due to falling demand, dogecoin (DOGE) replaced BUSD as the ninth-largest cryptocurrency by market capitalization, according to CoinMarketCap. READ MORE: Binance’s $16 billion USD market cap is up for grabs as Paxos regulatory action sparks competition with Stablecoin.
BUSD financial crisis
US crypto exchange Coinbase announced this week that it will stop trading BUSD on the platform from March 13. Coinbase’s CEO Brian Armstrong cited financial concerns for the stablecoin’s withdrawal. “Coinbase’s decision to delist can be considered as a precautionary measure in anticipation of future dips in liquidity or performance in terms of redemptions,” said Clara Medalie, research director at the company. Kaiko crypto market research, on CoinDesk.

The daily trading volume for BUSD on Coinbase is only around $9 million for the past two months, while the trading depth within 2% of the market price is only 600,000. dollar, according to data from Kaiko, makes the price of the stablecoin weak and swings. Market opportunities represent the open buying and selling of assets within a price range; The deeper the market, the more stable the price.
The price of BUSD on Binance, the main virtual currency exchange, has fallen significantly over the past month. Data from Kaiko shows that the market depth within 2% for the pair BUSD-USDT and BUSD-DAI stablecoin fell to $123 million from $200 million in February before the Paxos announcement.
“Overall liquidity is very important, which is not good for a stablecoin that should always trade 1:1” to the US dollar, Medalie said.

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