Mar 07, 2023
Binance Seeks Alternatives to BUSD with Decentralized Stablecoins
Binance, the leading cryptocurrency exchange by trading volume, is looking for new ways to meet its stablecoin needs following the United States Securities and Exchange Commission’s (SEC) regulatory action against its native stablecoin, Binance USD (BUSD). The SEC had sent a Wells notice, alleging BUSD violates U.S. securities law.
On-chain data shows that Binance has turned to a new set of stablecoins in the wake of the SEC’s notice. The crypto exchange minted 180 million TrueUSD (TUSD) from Feb. 16–24. TrustToken, the operator behind U.S. dollar-pegged stablecoin TUSD, has been a Binance partner since June 2019. The partnership allowed Binance to buy TUSD for zero fees and redeem it for fiat currency.
In addition to TUSD, Binance has also announced the listing of Liquity (LQTY) in the Innovation Zone on Feb 28 and the launch of TrueFi (TRU) perpetual contracts. TRU is the native token of the decentralized finance protocol TrueFi for uncollateralized lending.
The Binance listing for Liquity and TrueFi proved to be a big boost in their price, with both tokens surging 200% in the last month. Binance CEO Changpeng Zhao had said that the crypto exchange will look at other options to diversify its stablecoin away from BUSD after the regulatory actions, and these two listings are a testament to that.
Decentralized stablecoins have been gaining traction in the crypto ecosystem since the advent of Terra’s native stablecoin TerraUSD (UST). Market pundits believed decentralized stablecoins would be the next big thing in the crypto world. However, with the collapse of the Terra ecosystem in May 2022, the opinions about the nascent stablecoin concept changed.
The Office of the Comptroller of the Currency used the depeg and collapse of the UST algorithmic stablecoin as an example of stablecoins’ “run risk,” with asset-backed stablecoins also seeing minor depeg events as a result.
Binance’s move to onboard decentralized stablecoins and promote NFT marketing is a sign that the exchange is looking to stay ahead of the curve in the web3 space. It is also a clear indication that it is looking to capitalize on the growing popularity of NFTs and the potential for NFT promotion and marketing. The exchange is likely to invest in NFT marketing agencies and other web3 agencies in order to help its users sell NFTs and increase their visibility in the crypto world.Disclaimer: All investment or financial opinions expressed by MoonLanding Media are not recommendations and are intended for entertainment purposes only. Do your own research prior to making any kind of investment. This article has been generated based on trending topics, has not been fact checked and may contain incorrect information. Please verify all information before relying on it.