Binance USD (BUSD), the third-largest stablecoin, has seen its supply shrink by 60% since mid-February as it has been beleaguered.
This exodus has been caused by the U.S. Securities and Exchange Commission (SEC), which classified the Binance stablecoin issuer Paxos as a security on February 13.
The move prompted Paxos to announce that it would no longer be minting BUSD, leading to a significant outflow of funds.
As a result, BUSD’s market capitalization has slumped from just over $16 billion to around $10 billion, with its market share declining to 7.3% from around 20% last year.
This could have a negative impact on Binance’s financial performance, as BUSD is a significant part of its business.
Coinbase has also delisted BUSD for no longer meeting its listing standards. While Binance CEO Changpeng Zhao has played down the significance of BUSD for the exchange, the drop in supply could still impact its revenue.
