Stablecoin supply has now exceeded the whopping $200 billion mark. With this, the market noted more than 300% year-to-date rise for stablecoins. A sharp rise was first triggered by the significant decline in the price of cryptocurrencies following the Black Thursday market crash.
Interestingly, it is not just the big names such as Tether and USDC that saw a huge influx. Smaller and relatively newer stablecoins also considerable traction. In the latest development, Binance’s stablecoin BUSD was currently sitting at a market cap of $504 million. This was first observed by the Founder and CEO of the Malta-based crypto firm, CZ who tweeted,
#BUSD has hit 500m market Cap. The fastest growing stablecoin in the market, +161% in the past 30 days.
BUSD is actually not issued by #Binance, but by our partner @PaxosGlobal. pic.twitter.com/EMRYvwmLCv
— CZ Binance (@cz_binance) October 1, 2020
Binance had partnered with Paxos Trust Company in September 2019 to launch a USD-denominated stablecoin, BUSD after receiving a green signal from the New York State Department of Financial Services [NYDFS].
The rise of smaller cap stablecoins such as BUSD can also be directed to the increasing in user interest with DeFi. Generally, stablecoins are used by DeFi yield farmers to accept crypto stocks from various decentralized platforms such as Uniswap, Aave, and Curve which have been popping up in ever greater numbers this year. What has further added to the popularity is their offerings of larger and larger yields in the competition to attract locked funds.
Binance Chases DeFi
The cryptocurrency exchange has continued to grow its offerings in the DeFi space with new product launch almost every day. Hence, it is possible that BUSD may become a larger player in the stablecoin and the wider DeFi space which has largely been dominated by USDT.
Binance recently unveiled its new decentralized Binance Smart Chain which acts as a “bridge” between its DeFi and CeFi offerings. Since then the platform has continued to expand its footprint in the space. These developments were occasioned by huge BUSD inflows into Binance exchange over the past couple of weeks demonstrating a high potential buying power.
Binance’s Launchpool platform also provided a new venue allowing its users to farm assets such as BUSD. Additionally, first project on the platform was revealed to be Bella protocol where users will be able to stake their BNB, BUSD, and ARPA tokens.