Sunday, May 26, 2024

Stablecoin Wars Cause Binance USD (BUSD) to Increase

BUSD, the world’s third-largest stablecoin market share, has seen a surge in supply as it competes with the top two contenders. According to Bitcoin 360 AI review and the stablecoin’s issuer, Paxos, each unit of BUSD is backed by one US dollar, making it a fiat-backed stablecoin. Traders and crypto users frequently use stablecoins such as BUSD to hedge against the volatility of crypto markets.

Stablecoins have established themselves as one of the essential crypto assets among investors, traders, and general crypto enthusiasts. The primary goal of stablecoins is to encourage crypto adoption by addressing cryptocurrency volatility and regulation concerns.

Binance has been converting its USDC reserves into its stablecoin, BUSD. On October 23 2022, The Block’s Frank Chaparro noticed a supply shift when the amount of BUSD surpassed $20 billion for the first time.

Stablecoin Surge Again

The conversion of USDC to BUSD, according to crypto billionaire and FTX CEO Sam Bankman-Fried, has heralded the “Second Great Stablecoin War.” He added that the first one was in 2018, with USDT and USDC beating out TUSD, GUSD, and USDP.

SBF said that the difference this time is that interest rates are favourable, which means more revenue for stablecoins. “It’ll be interesting to see what emerges from the non-fiat-backed-stablecoin space, post-Luna and post-DAI-holding-USDC,” he said before adding, “something interest-bearing or otherwise with some upside.”

Tether’s USDT remains the largest stablecoin by market capitalisation, but its share has been dwindling recently as regulatory concerns grow and institutions shift to rival Circle’s USDC.

Three of the top ten crypto assets by market capitalisation are stablecoins, with a combined capitalisation of $134 billion, not far behind Ethereum.

Regulations for stablecoins are still a long way off in the United States. Despite the Biden administration’s pleas for greater urgency, Congress appears to be in no hurry to address the issues.

In reference to the long-awaited crypto regulations, Congressman Jim Himes recently stated, “It’s probably not happening in early 2023.”

Cryptocurrency Market Is Still Changing 

Stablecoins now account for 15% of total cryptocurrency market capitalisation, which is up 1.7% on the day to $975 billion.

The majors began to move during the weekday morning Asian trading session, with Bitcoin rising 1.3% to $19,600 and Ethereum rising 3.3% to $1,360. The moves are consistent with those seen over the last four months, and markets have remained firmly within their range-bound channel.

BUSD is considered one of the best cryptocurrencies by experts. The Binance USD is depicted by one of the world’s leading crypto exchanges, the Binance exchange, and is backed by the US dollar. So, it can be expected that BUSD will gain more investors and stability in the market. 

According to the introductory overview, the BUSD Binance token is a revolutionary asset in the stablecoin category. The Binance token is also an example of a highly regulated stablecoin with comparable or even superior security to other stablecoins. The benefit of strict compliance is a clear highlight for the Binance stablecoin and distinguishes it from others. Simultaneously, the secure backing by cash equivalents increases trust in the Binance stablecoin. Furthermore, the Binance stablecoin ensures lower fees during transactions and withdrawals. Binance stablecoin applications in various DeFi use cases demonstrate the new digital asset’s potential. 

According to CoinGecko, its supply is currently at an all-time high of $21.7 billion. This is roughly 15% of the total stablecoin market cap of $147 billion.

What is BUSD?

One of the most critical indicators for instilling confidence in crypto users and traders is the stability of a Binance USD chart. It can give users more flexibility when transacting with other digital and blockchain-based assets. 

Without the volatility issues, crypto owners may be able to interact with various types of blockchain-based assets. Furthermore, the Binance stablecoin can be a viable option for hedging against market volatility.

BUSD can be viewed as a fiat-backed stablecoin developed by Binance and Paxos, with a 1:1 backing against the US Dollar. As a result, one unit of BUSD is equivalent to one US Dollar, and its value fluctuates in tandem with USD. Furthermore, Binance stablecoin maintains a reserve report subject to monthly audits while adhering to strict regulatory standards. Binance stablecoin’s compliance with regulatory standards provides credible support in ensuring the safety and security of user assets.

The Binance USD chart could help convert crypto assets into stable assets. Furthermore, Binance stablecoin ensures flexibility for faster and lower-cost cross-border money transfers. Paxos offers BUSD on the Ethereum blockchain, whereas Binance offers a Binance-Pegged BUSD token on the BNB Chain.

Binance creates the stablecoin using the BEP-20 standard by storing Binance USD on an Ethereum address. Binance would then simply mint the peg stablecoin tokens. Each peg token corresponds to the tokens in the Binance reserve, and owners can swap the tokens between chains based on their needs.

Sam Allcock
Sam Allcock
Sam heads up Cheshire-based PR Fire, an online platform that has already helped over 10,000 businesses to grab widespread media coverage on their news at an extremely accessible price point.

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