Stablecoin Race: DAI Surpasses BUSD Amid Binance-SEC Regulatory Dispute

The DAI stablecoin has surpassed BUSD with nearly $4.6 billion in circulation amid growing legal troubles for the world’s largest crypto exchange, Binance.

BUSD’s market capitalization has dropped to $4.3 billion following the regulatory drama that began earlier this year.

• According to statistics According to CoinMarketcap, BUSD circulation is down by over 70% since the beginning of the year. During the same period, the circulation of DAI has also retreated but only by 20%.
• BUSD was launched in 2019 under the umbrella of Binance’s ‘Project Venus’. Although the crypto exchange does not issue a stablecoin, it has been in a downtrend for several months.
• Paxos’ move to stop mining the stablecoin at the end of February at the direction of the US New York Department of Financial Services (NYDFS) was the first major blow to the trajectory of BUSD.
• In March, the Commodities Futures Trading Commission (CFTC) filed a lawsuit against the exchange for improper licensing and offering false financial products to US consumers.
• The subsequent lawsuit by the SEC against Binance forced the crypto exchange out withdraw Eight BUSD trading pairs from its margin trading platform.
• While BUSD has shown impressive resilience in the face of turmoil as it managed to maintain its position among the top three most prominent stablecoins for several months, however, the recent jump in the burn rate ultimately saw its supply fall below DAI. pushed.
• Zooming out, the constant regulatory attacks on the industry have translated into a downtrend across the entire stablecoin market, which can be seen as capital draining from the digital asset space and a sign of a troubling trend.
• USDT’s divergence from the $1 peg this week fueled further FUD narratives, but Tether’s CTO reassured users that the company is ready to cash in on any amount.