Market capitalization of the BUSD stablecoin falls below $10 billion

The market capitalization of the Binance USD (BUSD) stablecoin fell below $10 billion for the first time since late June 2021. Data from CoinGecko show this.

As of writing, the figure stood at $9.7 billion.

In the ranking among stablecoins, BUSD ranks third behind USDT and USDC.

In February, the New York State Department of Financial Services (NYDFS) initiated an investigation into the issuer of Binance USD, Paxos.

Subsequently, its representatives said they would suspend the release of new coins in line with regulator requirements and severed cooperation with Binance regarding the stablecoin. The firm will continue to support buyback and conversion operations at least until February 2024.

It also emerged that there were threats from the U.S. Securities and Exchange Commission to sue Paxos over securities-law violations in the issuance of BUSD.

According to Bloomberg, in 2022 Circle filed a complaint with NYDFS concerning the quality of the stablecoin’s reserve management.

Against regulatory pressure, the lending protocol Aave decided to consider a proposal to freeze the use of BUSD as collateral, and Coinbase announced the halt of trading the ‘stablecoin’.

Matrixport’s head of research, Markus Thielen, said that regulatory pressure on BUSD does not pose risks to other ‘stablecoins’.

Earlier, Binance CEO Changpeng Zhao forecast an expansion in the number of non-dollar stablecoins.