The front lines between the major stablecoins have been moving in recent months. While Tether (USDT) has seen its hegemony threatened by the USDC, it is now the latter’s turn to be challenged by an outsider. Will Binance succeed and impose its BUSD
?
Binance converts UDSC to BUSD
Remember: a month ago the hegemonic exchange platform Binance decided to stop supporting certain stablecoins. Circle’s USDC in particular was targeted by the measure: users can still deposit USDC, but it is now automatically converted into BUSD, Binance’s stablecoin.
The move has been widely interpreted as Binance’s desire to promote its own cryptocurrency. BUSD is indeed the third most capitalised stablecoin. And its ambitions have grown.
The USDC had been clawing its way towards Tether’s USDT for months, to the point where observers were waiting for the moment when the latter might give way. But things have changed. Since Binance’s new policy, the BUSD has been on the rise. Its supply has risen sharply of late, topping $20 billion last September:
The rise in the capitalisation of the Binance BUSD
As for the USDC, its capitalisation continued to rise, but it also hit a low in June this year:
Shares of total capitalisation of major stablecoins
Can the BUSD overtake its rival USDC?
Since the Terra (LUNA) affair, and the catastrophic fall of its UST, stablecoins are particularly watched within the ecosystem. Binance in particular carries a lot of weight in the industry, and the arrival of its dollar-backed cryptocurrency with great fanfare may bode well for a strengthening of the company’s position.
So will this new stablecoin war be fatal for the USDC? It is still a long way off. But it is worth noting that Binance has positioned itself particularly well. It remains to be seen whether this will eventually allow it to overtake Circle’s stablecoin
