Binance has been selling its USDC reserves and converting them into its own stablecoin, BUSD. On Oct. 23, The Block’s Frank Chaparro noticed the supply shift as the amount of BUSD topped $20 billion for the first time ever.
Its supply currently stands at an all-time high of $21.7 billion, according to CoinGecko. This represents around 15% of the total stablecoin market cap, which is $147 billion.
So far this month, the percentage of trades denominated in BUSD stands at 22%, he added. Binance announced in September that it would be converting existing balances and new deposits of USDC, USDP, and TUSD into BUSD.
Crypto billionaire and FTX CEO Sam Bankman-Fried commented that the conversion from USDC into BUSD has heralded the “Second Great Stablecoin War.”
The first one was in 2018, with USDT and USDC edging out TUSD, GUSD, and USDP, he added.
SBF continued to comment that the difference this time is positive interest rates 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 that it will be “something interest-bearing or otherwise with some upside.”
Tether’s USDT is still the largest stablecoin by market capitalization, but its share has been eroded recently as regulatory concerns mount up and institutions switch to rival Circle’s USDC.
Three of the top ten crypto assets by market cap are stablecoins with a combined capitalization of $134 billion, which is not far off that of Ethereum.
Stablecoin regulations are still a long way off in the United States. Congress appears to be in no rush to address the issues despite the Biden administration pushing for a little more urgency.
Last week, Congressman Jim Himes said, “It’s probably not happening in early 2023,” with reference to the long-awaited crypto regulations.
Stablecoins currently represent 15% of the total crypto market capitalization, which is up 1.7% on the day to $975 billion.
The majors started to move during the Monday morning Asian trading session, with Bitcoin adding 1.3% on the day to top $19,600 and Ethereum gaining 3.3% in a move above $1,360.
The moves are typical of those over the past four months, and markets remain well within their range-bound channel.