TrueUSD (TUSD) recently announced that it has surpassed Binance USD (BUSD) for the first time, reaching a market cap of $3.4 billion. This landmark event comes on the heels of Binance's decision to phase out support for BUSD due to regulatory pressures in the US.
TUSD surpasses BUSD amid regulatory action
Binance, the giant of global cryptocurrency trading volume, cut off its support for BUSD after the token's issuer, Paxos, stopped issuing new tokens. Regulatory pressure from US authorities caused Paxos to halt production and forced Binance to reconsider its portfolio strategy.
This announcement was a turning point and reduced the market value of BUSD to just under $3 billion, according to Etherscan data dated September 3, 2023. Meanwhile, TUSD, once seen as a smaller rival to BUSD, has seen its fortunes rise. In three days, the coin's supply increased from 2.9 billion to 3.438 billion, showing a remarkable growth of 18.55 percent.
Factors helping TUSD rise
Various factors appear to have contributed to TUSD's sudden rise, many of which have to do with Binance's changing tactics. For example, Binance recently launched two projects on the Launchpool platform called Sei and CyberConnect. Here, users can deposit their TUSD to generate new tokens. The crypto exchange also introduced new CYBER/TUSD and SEI/TUSD pairs and included them in its ecosystem.
It has also become available through crypto payment gateway Alchemy Pay, expanding its reach to 173 countries. These maneuvers reveal how deeply the stablecoin is integrated with Binance even as it moves away from its own stablecoin, BUSD.
Binance holds more than 5 percent of the TUSD supply and manages a staggering $17 billion worth of Tether (USDT), according to data analysis firm Nansen. These holdings demonstrate Binance's strategic flexibility in the face of regulatory scrutiny and market competition.
It also focused on strengthening user experience, a key strategy to capture a larger market share. It aims to provide a seamless user experience by opening a new domain name and a redesigned website.
The rise of stablecoins within the broader stablecoin ecosystem illustrates the fluid dynamics of a market conditioned by regulatory realities and strategic business decisions. The stablecoin took advantage of an opportune moment to grow its market share. However, its rise also underscores the instability of crypto, where market positions can change dramatically in a matter of days.
