New data from CryptoQuant, a chain analysis companyshow that $ 113M Binance USD (BUSD) entered the Binance exchange last week. This means that The BUSD stablecoin now has the highest purchasing power potential compared to all other US dollar-based stablecoins and is the second largest after Tether (USDT).
BUSD entry for Binance. Source: CryptoQuant
Binance’s new USD-backed stablecoin is based on an ERC-20 token and was launched in 2019 in collaboration with Paxos. Since then, BUSD has steadily gained momentum with increasing volume. and recently outperformed USD Coin (USDC) on September 4th.
24-hour volume of the best competing USD-backed stablecoins. Source: Skew
Binance wants a piece of the DeFi pie
With a market cap of $ 363 million, BUSD is the third largest stablecoin on the market. However, as Binance continues to expand its offering, it is possible that BUSD becomes a bigger player in the stablecoin and DeFi space, largely dominated by USDT.
Binance has already shown great interest in playing a bigger role in the DeFi ecosystem. and on September 1st the stock exchange started its Binance Smart Chain.
The Binance chain allows DeFi protocols to run with lower fees than the Ethereum blockchain BNB staking out is also possible via the platform.
On September 11th, the popular DeFi protocol, CREAM. announced that it will switch to the Binance chain And unlike most DeFi platforms The protocol supports BNB, BUSD, BTC, ETH, XRP, BCH and LTC yield farming.
Recently, Binance also unveiled the Launchpool platform, a new place for users to manage assets like BUSD. The platform’s first project is the Bella protocol and where users can set their BNB, BUSD and ARPA tokens.
Stablecoins are seeing triple-digit growth in 2020, but institutional rivals are coming
2020 was a very fertile year for the massive growth of stable coins. This is mainly due to the explosion of decentralized financial and performance-related protocols.
According to Coin Metrics The market capitalization of most US dollar-based stablecoins steadily increased by about $ 100 million a day over nearly two months mainly to these liquidity groups.
This growth appears to be heavily dependent on the DeFi ecosystem, and even if it continues to grow, stablecoins still face some challenges. As the arrival of the Central Banks Digital Currencies (CBDC) one of them.
It is also possible for large financial institutions and corporations Become competitors within the current stablecoin ecosystem as you develop your own digital currencies and blockchain networks.