For the first time, Binance Dollar (BUSD), the stablecoin that represents the partnership between major crypto exchange Binance and Paxos Trust, has crossed the $100M market capitalization mark. This significant milestone was reported on March 10.
At the time of writing, BUSD holds the sixth spot in the list of largest stablecoins by market cap. When the stablecoin was released back in September 2019, its market cap sat only at $22 million. Today, it is now at $115 million, a figure that represents a growth of 400%.
Changpeng Zhao or CZ, the CEO of Binance, shares his optimism that the trend would likely to continue as more and more users realize the utility of BUSD. He also touted that the stablecoin has been approved by the New York State Department of Financial Services (NYDFS).
Rich Teo, the co-founder of Paxos, commented that the massive growth reflects the market’s hunger for better alternatives. He also shared that the company, with the help of Binance, would continue to provide global users with optimal solutions for their needs.
CZ added that BUSD holders have the opportunity to grow their assets, courtesy of Binance’s lending program. Participants can notably earn an annual interest of up to 15%. Another crypto exchange platform, Coinbase, also offers a lending program that involves USDC. However, compared to Binance’s generous interest rate, Coinbase only offers 1.25%. Blockfi, Celsius Network, and Nexo are also some of the companies that have followed this crypto deposit interest strategy. According to industry analysts, the emergence of DeFi would catalyze intense competition within the industry.
While the 400% market cap surge can be considered as fantastic, BUSD’s total market cap as of press time is still a far cry from Tether’s (USDT). Tether’s market cap stands mightily at $4.5 billion. However, if BUSD would be able to keep its current pace, the stablecoin would only need two and a half months to catch up.
It’s also worth noting that Binance is one of the platforms that do not allow crypto users to trade their assets using dollars. This restriction emphasizes the importance of stablecoins, such as BUSD. Aside from BUSD, Binance is supporting a wide range of stablecoins, with USDT having the highest volume. According to CoinGecko’s report, 40% of trading transactions on the Binance platform involves BUSD/USDT. The trading of Binance Dollar against Bitcoin (BTC) only accounts for 35%.