Jalandhar (CoinChapter): Binance is picking a diverse set of stablecoins after its US dollar-pegged token, Binance USD (BUSD), fell under the regulatory trap set by the US Securities and Exchange Commission (SEC).
For the unversed: the SEC sent a Wells notice to Paxful, a US-based crypto company that issued and listed BUSD, stating that they broke US securities laws.
Meanwhile, the New York Department of Financial Services (NYDFS) requested Paxos to halt issuing new BUSD tokens. This block has forced Binance to look for different ways to fulfill its requirement for stablecoins.
Binance Mints $180 Worth of Stablecoin to Offset BUSD FUD
Binance’s stablecoin alternatives include TrueUSD (TUSD), with the exchange minting 180 million TUSD tokens between Feb 16 and 24.
TrustToken, the organization responsible for the US dollar-pegged stablecoin TUSD, has partnered with Binance. This relationship allowed Binance to obtain TUSD at no cost and to turn it into fiat money.
Interestingly, the connection between Binance and TUSD marks a complete turn, given the former sold its TUSD reserves to increase its BUSD holdings in September 2022. But now, the SEC crackdown has forced Binance to undo its call regarding TUSD.
Changpeng Zhao, CEO of Binance, recently declared that the crypto exchange would investigate other avenues to diversify its stablecoin away from BUSD in light of certain regulatory measures.
Subsequently, Binance endorsed the decentralized borrowing protocol Liquity (LQTY) and unveiled TrueFi (TRU) perpetual contracts. TRU is the token used by the decentralized finance protocol TrueFi for uncollateralized lending.
Recently, Liquity and TrueFi saw a huge jump in their value after being listed on Binance, with both tokens experiencing a rise of 200% in the last month.
When Terra’s native stablecoin, TerraUSD (UST), emerged, decentralized stablecoins began to gain prominence. As a result, analysts predicted that these coins would become a mainstay in the crypto world. However, following the breakdown of the Terra system in May 2022, people’s estimations of the technology quickly altered.
The OCC used the depeg and crash of the UST algorithmic stablecoin to illustrate the potential “run risk” of stablecoins. Additionally, some asset-backed stablecoins have experienced minor depeg events.
The post Binance Almost Bye-Byes Tainted Stablecoin BUSD to Make Room for Rivals appeared first on CoinChapter.