Binance mints 50M TrueUSD days after Paxos ordered to stop issuing BUSD
Just days after reports of US regulatory scrutiny of Paxos and Binance USD (BUSD), cryptocurrency exchange Binance has minted nearly $50 million in TrueUSD (TUSD).
The transaction took place on February 16, according to data from Etherscan, and also comes two days after Binance CEO Chanpeng ‘CZ’ Zhao said in a Twitter Space on February 14 that Binance would look to “diversify” its stablecoin holdings away from BUSD.
Despite minting nearly $50 million in TUSD from the TrustToken platform’s smart contract on February 16, CZ had previously said that the recent regulatory action by the United States Securities Exchange Commission (SEC) and the New York Department of Financial Services (NYDFS ) over a long time. term could lead to a fall in the dominance of US dollar-backed stablecoins.
“I think with the current positions taken by the regulators on the US dollar-based stablecoin, the industry will probably move away to a non-US dollar-based stablecoin, back to algorithmic stablecoins.”
“There are several agencies that put pressure there. It’s only going to shrink the US dollar-based stablecoin market,” he added.
CZ said that “this has caused us to look for more options in different locations” and that they are now exploring other options.
While the CEO stated that Binance would provide more support for USD Coin (USDC) and Tether (USDT) in the short term – in anticipation of BUSD “winding down over time” – he added that they are now looking to explore more into the Euro and Japanese yen-based stablecoins.
As for BUSD, CZ said “the existing circulating supply of BUSD is there and safe, and as more people want to redeem, they will be burned.”
Interestingly, the Binance CEO added that he was never too optimistic about the success of the Binance-branded BUSD stablecoin anyway:
“To be honest, BUSD was never a big business for us, when we started I actually thought the BUSD project might fail, so we actually don’t have very good financials on that collaboration.”
Interestingly, in September, TUSD was one of the stablecoins that Binance automatically converted to BUSD to improve liquidity and capital efficiency for users. Other stablecoins that were automatically converted were USDC and USDP Stablecoin (USDP). This increased BUSD’s share of the stablecoin market from 10% to 15% in a matter of weeks.
Related: TrueUSD and Balancer offer liquidity providers TUSD and BAL rewards from the Stablecoin Pool Incentive Program
TrustToken launched TUSD on March 5, 2018, operating on the Ethereum, Avalanche, MATIC and Tron networks.
New TUSD are minted every time a buyer transfers USD to a third-party escrow that holds USD deposits on behalf of Prime Trust. Once received, TUSD will be transferred at a 1:1 ratio to USD sent to the trader’s nominated ERC-20 or BEP-2 wallet address.
