Binance Generates 50 Million TrueUSD Tokens Shortly Following Paxos’ Cease of BUSD Issuance
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Binance, a cryptocurrency exchange, has minted nearly $50 million worth of TrueUSD (TUSD) just days after reports emerged about United States regulatory scrutiny of Paxos and Binance USD (BUSD).
The transaction was recorded on Feb. 16, as per data from Etherscan. The move follows Binance CEO Chanpeng ‘CZ’ Zhao’s statement in a Feb. 14 Twitter Spaces that the exchange would seek to diversify its stablecoin holdings away from BUSD.
We’re live!
Tune-in to our Twitter Space AMA with @cz_binance below https://t.co/bXIztCKdry
— Binance (@binance) February 14, 2023
Despite the minting of nearly $50 million in TUSD from the TrustToken platform’s smart contract, CZ highlighted that the recent regulatory action by the United States Securities Exchange Commission (SEC) and the New York Department of Financial Services (NYDFS) over the long term may lead to a decline in the dominance of U.S. dollar-backed stablecoins.
“I think with the current stances taken by the regulators on the U.S. Dollar-based stablecoin, the industry will probably move away to a non-U.S. Dollar-based stablecoin, back to algorithmic stablecoins.”
CZ stated that “there’s multiple agencies putting applied pressure there. It is just going to shrink the U.S. Dollar-based stablecoin market”.
He added that “this has prompted us to look for 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 #Alameda and #justinsun are the two largest minters of $TUSD.#Alameda 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
Although Binance will provide more support for USD Coin (USDC) and Tether (USDT) in the short term, in anticipation of BUSD “winding down over time”, they are looking into Euro and Japanese Yen-based stablecoins.
CZ also stated that the existing circulating supply of BUSD is safe and as more people want to redeem, they will be burned.
The Binance CEO noted that he wasn’t overly optimistic about the prosperity of the Binance-branded BUSD stablecoin, which is an intriguing revelation.
“To be honest BUSD was never a big business for us, when we started I actually thought the BUSD project may fail, so we actually don’t have very good economics on that collaboration.”
TUSD was one of the stablecoins that Binance auto-converted to BUSD in September, along with USDC and USDP Stablecoin (USDP), to enhance liquidity and capital-efficiency for its users.
TrustToken launched TUSD on Mar. 5, 2018, which operates on the Ethereum, Avalanche, MATIC and Tron networks.
New TUSD is minted when a buyer wires USD to a third-party escrow that holds USD deposits on Prime Trust’s behalf.
After it’s received, TUSD will be moved to the trader’s designated ERC-20 or BEP-2 wallet address at a 1:1 ratio with the USD that was sent.
