On Monday, Vincent Chok, Founder and CEO of First Digital, expressed gratitude for the tremendous growth of First Digital USD’s (FDUSD) market capitalization, which now stands at $1 billion. This achievement follows Binance’s announcement of transitioning from BUSD to FDUSD, a new contender in the largest exchange stablecoin arena.
🙌 This remarkable growth is a result of our team’s relentless dedication & ruthless diligence, plus the trust our clients have in our vision for a stable and efficient digital currency.#Leadership #GrowthStory
— Vincent Chok (@vchok) December 5, 2023
In an official press release on December 15, 2023, Binance announced its decision to cease support for BUSD. The exchange actively promoted FDUSD as a viable alternative, encouraging users to trade or convert BUSD balances into FDUSD free of charge.
Since its launch, FDUSD has seen a remarkable market growth. Within a month of its July listing on Binance, its market cap surpassed $300 million. At present, it has exceeded $1 billion, securing the sixth position among the most valuable stablecoins, according to CoinMarketCap data. This places FDUSD ahead of USDD in the seventh spot, with a market cap of around $725 million, and on the heels of BUSD in the fifth spot.
Conversely, BUSD, once a dominant stablecoin, has faced challenges since Paxos severed ties with Binance in February due to regulatory issues. BUSD’s market cap has dwindled from a peak of $23 billion to just $1.6 billion, reflecting a decline of over 92% in 12 months as of the current date.
Binance’s latest announcement doesn’t come as a surprise as the exchange initially announced in August that it would “gradually cease support” for BUSD after Paxos said it would “end its relationship with Binance.” This shift away from BUSD support was even foreseen coming amidst the regulatory pressures surrounding the stablecoin.
The sequence of events was initiated on February 13, 2023, when the New York Department of Financial Services (NYDFS) ordered a cessation of further BUSD mints from Paxos, the then-partner and issuer. Simultaneously, reports surfaced that the Securities and Exchange Commission (SEC) had issued a Wells notice, classifying BUSD as a security.
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