Before Paxos issued a press release at 6 am ET on Monday, the BUSD stablecoin had about 16.16 billion tokens in circulation. Nearly $290 million has been redeemed in the last eight hours, bringing the amount of BUSD in circulation to 15.87 billion.
BUSD Stablecoin Sees Increased Redemption Activity During Regulatory Review
The stablecoin BUSD shows increased activity on Monday as it is the third largest stablecoin by market cap. 286 720 127 BUSD redeemed about eight hours later. The heightened activity began the day before when reports claimed that the US Securities and Exchange Commission (SEC) sent a notice to Wells to Paxos about possible charges. Earlier reports also claimed that the New York City Department of Financial Services (NYDFS) was investigating Paxos.
The next day, Paxos published Press release stating that it is cooperating with the New York City Department of Financial Services (NYDFS) and will stop issuing BUSD. The company added that “existing BUSD tokens will remain fully collateralized and redeemable through Paxos Trust Company until at least February 2024.” Along with the Paxos press release, the New York City regulator released Notice to Consumers regarding the binance usd (BUSD) stablecoin issued by Paxos.
Redemptions have begun: Almost $290 million was redeemed on Monday, after billions redeemed in recent months. Three months ago, BUSD had a market capitalization of roughly $23.24 billion and over 30% of its supply has been redeemed in the last 90 days. Monday’s redemptions caused small price fluctuations, and BUSD fell to a low in $0.992245 February 13.
Most BUSD trading today is paired with Tether (USDT), followed by the Turkish lira, DAI Makerdao and the US dollar, according to statistics from CryptoCompare.com on Monday. Prior to the Paxos press release on Monday morning, BUSD trading volume was around $15 billion, but it has since increased 18% to $17.60 billion by 3:15 pm ET. In addition to the large number of redemptions, Binance CEO Changpeng Zhao (CZ) warns of serious consequences for the crypto sector if BUSD is considered a security.
What impact will recent redemptions and regulatory scrutiny have on the future of BUSD and other stablecoins in the market? Share your thoughts in the comments section below.
Denial of responsibilityA: This article is for informational purposes only. It is not a direct offer or solicitation to buy or sell, nor is it a recommendation or endorsement of any products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is directly or indirectly liable for any damage or loss caused or alleged to be caused by the use of or reliance on any content, goods or services mentioned in this article.
Credit : news.bitcoin.com
