Bitcoin traders on Binance have rapidly migrated to TUSD after the exchange stopped charging fees on the trading pair.
TrueUSD (TUSD) has emerged as the fifth largest stablecoin by market cap after Binance began using the token as its dollar-pegged crypto of choice in late February.
Last week, the BTC/TUSD trading pair surpassed 50% of Binance’s Bitcoin trading share, overtaking BTC/USDT.
Is TUSD Tether’s Next Rival?
According to an analysis from crypto market data provider Kaiko on Monday, BTC/TUSD became the largest Bitcoin market on Binance last week following a period of overwhelming dominance by BTC/USDT as recently as last month.
https://twitter.com/KaikoData/status/1647910074096943104
USDT was launched by Tether back in 2014 as one of the first-dollar-pegged stablecoins, and remains the largest of such tokens by market cap today. Capturing over $80 billion in value as of April 2023, it maintains its peg to the dollar using liquid reserves comprised of both cash and short-term US Treasury bills.
USDT gained significant ground against Circle’s USDC – one of its largest competitors – when Binance replaced the latter cryptocurrency at its exchange with BUSD in September. Tether’s market cap benefitted further after USDC temporarily depegged from the dollar amid the Silicon Valley Bank crisis in March.
However, things took a turn when BUSD issuer Paxos was forced by US regulators to begin winding down operations in February. In search of ways to pivot away from it dependence on BUSD, Binance quickly began minting tens of millions of dollars in TUSD. As of April 17, TUSD’s market cap is over $2 billion, compared to roughly $966 million on February 27.
TrueUSD operates much like Tether, holding over $2.15 billion in bank reserves to back its token. In partnership with Chainlink, the firm uses a real-time proof of reserves system to cryptographically verify that its stablecoin is fully backed at all times.
Binance’s Shift To TUSD
By late March, Binance had added a host of new TUSD trading pairs including LDO/TUSD, MATIC/TUSD, OP/TUSD, SOL/TUSD, SSV/TUSD, and XRP/TUSD. It also made TUSD the sole stablecoin to inherit its zero-fee BTC trading fee policy after March 22 – the precise point at which BTC/TUSD volume on Binance began to overtake other Bitcoin pairs.
TrueUSD’s 24-hour total volume as of April 17 is $226 million. Meanwhile, USDT’s daily volume is higher than any other cryptocurrency, at $31.5 billion.
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