Binance raises USDC holdings as BUSD’s market cap drops

On Sept. 5, 2022, Binance dropped USD coin (USDC) trading pairs and auto-converted customer balances to BUSD

Eight days ago, Paxos said that it would not mint the stablecoin BUSD anymore. Since then, the market capitalization of the coin has been dropping as redemptions have become more prominent. In the meantime, a data researcher from Nansen has discovered that Binance, the biggest crypto currency exchange in terms of trade volume, has raised its USD coin holdings by $1.5bln during the past seven days.

As per Nansen’s data journalist Martin Lee, the quantity of USD coin (USDC) held on Binance has been consistently jumping this week.

Interesting to see the amount of USDC on Binance rise so much since the BUSD news, Lee tweeted on Tuesday. He further elaborated that Binance saw a $1.5bln rise in USDC during the past seven days.

Lee also noted that he would have contemplated the supply of tether (USDT) to rise on Binance more than USDC, ‘given that you cannot trade using USDC’ on Binance. On September 5, 2022, Binance shed USD coin (USDC) trading pairs and auto-converted customer balances to BUSD. Two weeks later, Wazirx followed Binance’s move, delisting USD coin (USDC) and a couple of other stablecoins to auto-convert balances to BUSD.

On February 19, Bitcoin.com News reported that nearly 3bln BUSD had been pulled out from the market, and today, that number is up to 3.55bln since Paxos disclosed it would no longer mint BUSD. The Paxos-managed stablecoin is still the third-biggest stablecoin in terms of market capitalization until it falls below DAI’s market valuation of $5bln. BUSD, which was once one of the top-ten crypto asset by market capitalization, is getting awfully close to being knocked out of the top ten.

The Nansen researcher also noted that there is $1.8bln USDC in Binance’s main wallet today, and it is the highest it has been in 90 days. At 7:00 pm GMT on February 21, 2023, there is $1.821bln USDC held in Binance’s wallet. It is worth noting that Nansen’s portfolio viewer only looks at ERC20-based balances, and Binance has only more than 100mln Tether (USDT) in the same wallet. The Binance wallet also holds 79.24mln trueusd (TUSD) and 5.34mln DAI.