Just days after reports of US regulatory scrutiny on Paxos and Binance (BUSD), the cryptocurrency exchange Binance has minted almost $50 million worth of TrueUSD (TUSD).
The transaction took place on February 16, according to Etherscan data.and also comes two days after Binance CEO Chanpeng “CZ” Zhao said on Twitter on Feb. 14 that Binance would look to “diversify” its stablecoin holdings away from BUSD.
We’re alive!
Tune-in to our Twitter Space AMA with @cz_binance below https://t.co/bXIztCKdry
—Binance (@binance) February 14, 2023
We are live! Tune in to our “ask me anything” Twitter Space with @cz_binance.
Despite minting nearly $50 million in TUSD from the TrustToken platform smart contract, CZ had previously said that recent regulatory action by the United States Securities and Exchange Commission and the New York Department of Financial Services may in the long term lead to a decline in the dominance of US dollar-backed stablecoins.
“I think that with the current stances taken by regulators on US dollar-based stablecoins, the industry will likely move away towards a non-US dollar-based stablecoin, back to algorithmic stablecoins.”
“There are multiple agencies lobbying there. This is only going to shrink the market for US dollar-based stablecoins,” he added.
CZ said that “this has prompted us to look at more options in different places” and that they are now exploring other options.
50M #TUSD minted at #Binance and the price of $TRU increased by 200%.
On-chain data shows that #Mall and #justinsun are the two largest minters of $TUSD.#Mall minted a total of 1.64B $TUSD in history.#justinsun minted a total of 889M $TUSD in history. pic.twitter.com/N1tUjFQm5U
— Lookonchain (@lookonchain) February 16, 2023
50 million TUSD was minted on Binance and the price of $TRU increased by 200%. On-chain data shows that Alameda and Justin Sun are the top two minters of $TUSD. Alameda minted a total of $TUSD 1.64 billion in history. Justin Sun minted a total of 889 million TUSD in history.
While the CEO stated that Binance would provide more support for USD Coin (USDC) and Tether (USDT) in the near term -with the expectation that BUSD will “shrink over time”- He added that they are now looking to explore further into Euro- and Japanese Yen-based stablecoins.
As for BUSD, CZ said that “the existing circulating supply of BUSD is there and safe, and as more people want to redeem, they will burn.”
Curiously, The Binance CEO added that he was never too optimistic about the success of Binance’s BUSD stablecoin anyway:
“To be honest, BUSD was never a big deal for us; when we started I actually thought the BUSD project might fail, so we don’t really have very good economics on that collaboration.”
Curiously, In September, TUSD was one of the stablecoins that Binance autoconverted to BUSD to improve liquidity and capital efficiency for its users. Other stablecoins that self-converted were USDC and USDP Stablecoin (USDP). This raised BUSD’s share of the stablecoin market from 10% to 15% in a matter of weeks.
TrustToken launched TUSD on March 5, 2018. It exists on the Ethereum, Avalanche, Polygon, and Tron networks.
New TUSDs are minted each time a buyer transfers USD to a third-party escrow account that holds USD deposits on behalf of Prime Trust. Upon receipt, TUSD will be transferred at a 1:1 ratio to USD sent to the trader’s designated ERC-20 or BEP-2 wallet address.
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