USD 2.86 Billion in BUSD Stablecoins Have Been Redeemed in 6 days

USD 2.86 Billion in BUSD Stablecoins Have Been Redeemed in 6 days

USD 2.86 billion worth of BUSD has been redeemed in six days after the blockchain infrastructure platform Paxos announced it would no longer mint BUSD stablecoins. Binance is the most active trading exchange for BUSD tokens, and the stablecoin commands around 10.7% of the crypto economy’s USD 67.71 billion in global trade volume over the past 24 hours.

BUSD Supply Plummets 17.77% in 6 Days

Data reveals that a significant amount of BUSD has been redeemed over the past six days, with the supply dipping by 17.77% during the period. Over the past 30 days, the supply of BUSD has fallen by 19.2%. Paxos, the company that issues, manages, and redeems BUSD, announced on February 13, 2023, that it would no longer mint new BUSD stablecoins.

Redemptions peaked after Paxos made the announcement, with USD 290 million being redeemed within eight hours. At the time of the announcement, there were 16.1 billion BUSD in circulation. As of February 19, 2023, there were approximately 13,238,824,118 BUSD in circulation, meaning that the 17.77% of BUSD redeemed accounted for 2.861 billion tokens being removed from the market.

BUSD Commands 10.7% of the Global Trade Volume

The blockchain intelligence firm Nansen has been monitoring the Paxos Treasury wallet, which sends millions of BUSD to the burn address, effectively removing the stablecoins from circulation. According to Nansen’s exchange portfolio tool, Binance holds 10.9 billion BUSD as of February 19, 2023. Metrics show that BUSD accounts for USD 7.24 billion of the USD 67.71 billion daily global trade volume, representing around 10.7% of the total volume.

Binance dominates most of the BUSD trading volume, and tether (USDT) is the stablecoin’s most popular trading pair. Data from cryptocompare.com also reveals that 5.52% of BUSD volume on 19 February, was also paired with the Turkish lira. Although BUSD had the most redemptions in the past 30 days, USDC lost 2.9% of its supply during that period.

Pax dollar (USDP), the other stablecoin of Paxos, has also witnessed its supply plummet by 19.3%. A significant amount of Pax Gold (PAXG) has also been removed, accounting for 11.3% of the circulating supply in 30 days. In contrast, tether (USDT) supply has increased by 5.8%, resulting in a market capitalization of more than USD 70 billion.

What is your take on the future of BUSD stablecoin after the recent developments and redemptions? Please post your comments.