According to a recently released data, the market capitalization of the stablecoins in the sector dropped to its lowest level since September 2021 in February, falling by 0.68% to $136 billion, marking the eleventh consecutive monthly decline.
The entire market share of stablecoins in the industry is currently lying at 11.4%, down from roughly 12.31% in January, according to CryptoCompare’s most recent Stablecoins & CBDCs Report. Since April 2022, this is their lowest market share.The study continues that the reduction emphasizes “the recent surge in the prices of crypto assets and the shrinking stablecoin market cap.”
The New York Department of Financial Services (NYDFS) has instructed Paxos to stop creating Binance USD (BUSD), a stablecoin, according to the report, and its market capitalization has dropped 18% to $13.2 billion as a result.
The U.S. Securities and Exchange Commission (SEC), which notifies entities of potential enforcement action, also informed Paxos in a letter known as a “Wells notice” that the agency intends to sue the company for breaking investor protection laws.
Binance Dollar (BUSD), according to the notice, is an unregistered security. BUSD is a Paxos stablecoin with the Binance name that is traded on a number of exchanges, including Paxos’ itBit platform.
In the meantime, the market capitalization of USDT has grown by $2 billion, according to the analysis from CryptoCompare. The number and a 676% increase in BUSD/USDT trading volume on February 13 indicate that a significant portion of the BUSD has been exchanged for USDT on the exchange.
According to the research, the stablecoin for USDT had a market share gain in February from 48.7% to 51.7%, which was the highest level since October 2021.
Stablecoins from Paxos experienced considerable withdrawals after the SEC’s action against BUSD. Because to this, the market caps of BinanceUSD (BUSD) and Pax Dollar (USDP) fell by 15.8% and 24.37%, respectively, to $13.3 billion and $729 million. As a result, USDD beat USDP to become the seventh-largest stablecoin, and in February, its market cap increased by 0.57% to $724 million.
Tether’s USDT and TrueUSD (TUSD), whose market capitalization grew by 3.85% and 2.31% to $70.4 billion and $968 million, respectively, may have profited from the collapse in the BUSD. The research notes that USD Coin’s (USDC) market valuation decreased by 1.76% to $41.4 billion.
