The founder of Binance, the largest #cryptocurrency exchange in the world, Changpeng Zhao, used Twitter earlier today to highlight the market conditions for stablecoins. The #Binance CEO began by highlighting the absurdity in Binance USD's (BUSD) winding down despite it being the “most fiat-backed stablecoin.”

Zhao's tweet said that #Paxos Trust Company, a stablecoin company governed by the New York Department of Financial Services (NYDFS) and audited by major accounting firms, was the issuer of BUSD. Nevertheless, when Paxos was instructed to stop creating the stablecoin last month, these reasons proved to be useless.

Changpeng Zhao emphasized that Tether USD (USDT), the largest stablecoin in the world, had been able to increase its market value by more than 9% despite the crackdown on Paxos and BUSD. The market capitalization of USDT has increased to a staggering $77 billion since the minting of #BUSD was stopped on February 21.

BUSD's market value, meanwhile, has experienced a severe decline, falling by more than 37% during the same time frame. The stablecoin had a $8.1 billion market valuation at the time of writing. Another stablecoin is failing as a result of the recent turbulence in the banking sector.

The founder of Binance called attention to USD Coin's (USDC) plight, which was made worse by Silicon Valley Bank's (SVB) collapse last week. For a brief while, the stablecoin was not tied to the US dollar and traded as low as 90 cents. According to Changpeng Zhao, bank closures are also lowering USDC's market capitalization. Since March 10 when SVB fell, the market cap of the stablecoin has decreased by more than 18%.

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The Paxos Treasury has burnt 140,000,000 BUSD, knocking the Binance Dollar (BUSD) out of the top 10 by capitalization.

BUSD is quickly disappearing from the stablecoin market as Paxos is given the death penalty by US regulators. Although Paxos is devoted to maintaining the margin and converting BUSD to cash, the market share of this stablecoin is definitely dropping. Due to the inability to produce new coins and Paxos' continual burning of currencies, the current supply of this stablecoin is just about 10.98 billion tokens, a loss of over 31% over the past 30 days.

This directly reflects the stablecoin's position in terms of market capitalization. CoinGecko stated, BUSD was sixth in terms of market value prior to the incident but has now slid out of the top 10 and is now at position 11.The coin that gains the most from maintaining its unique status is Tether (USDT). The entire supply of USDT has climbed by around 5% during the last 30 days, DefiLlama said, increasing the stablecoin’s capitalisation to $70.9 billion. With a direct market share of 52.3% held by Tether, the stablecoin market cap is currently hovering around $135.4 billion.

The Dollar Coin (USDC) from Circle comes in second. In spite of accusations that it suggested Paxos-BUSD to New York officials, Circle has persisted lately. The USDC market capitalisation is now about 42.2 billion USD, representing 31.2% of the market. Another stablecoin that is rising in popularity is TrueUSD (TUSD). Binance appears to be moving its priority to TUSD after being unable to do business with BUSD, as Binance issued a huge quantity of stablecoin TUSD on February 17. The 30-day period saw a 16% increase in TUSD supply, bringing the capitalization to $1.1 billion. With a 0.8% market share at the moment, TrueUSD is ranked fifth, behind USDT, USDC, BUSD, and DAI.

The stablecoin war is anticipated to intensify soon as new competitors like Curve's crvUSD, Aave's GHO, and Fantom's fUSD join the fight.

#Paxos #Binance #BUSD #crypto2023

Over the recent weekend, as tensions in the Middle East escalated following an Iranian drone and missile attack on Israeli targets, the digital asset market saw divergent reactions between two prominent cryptocurrencies. PAX Gold (PAXG), a gold-backed token by Paxos, soared to a new high of $2,855 on April 13, while Bitcoin experienced a significant drop, plummeting $5,000 from over $67,500 to approximately $62,700, a decrease of 7.5% in a single day, according to CoinGecko data.
This stark contrast in performance has led to renewed scrutiny of Bitcoin's effectiveness as a geopolitical hedge. Bob Elliott, the co-founder and CEO of Unlimited Funds and a former executive at Bridgewater Associates, commented on social media platform X, “Bitcoin may be many things, but it is not a geopolitical hedge.” He observed a near-perfect negative correlation between Bitcoin and PAXG during this period, suggesting that Bitcoin's utility as a hedge may be diminishing over time.

While PAXG reached a peak coinciding with gold, which hit $2,400 per ounce last week, its momentum was short-lived, retreating to a spot gold-linked price of around $2,376. Despite the token's progress, climbing 20% since early March, it faces challenges such as low liquidity—its daily trading volume is around $36 million, significantly lower than more established cryptocurrencies.
On-chain analyst "Checkmatey" from Glassnode criticized market commentators using the temporary price increase of PAXG to undermine Bitcoin, labeling such comparisons as non-serious. Meanwhile, historical data highlighted by Elliott pointed to similar market behaviors in the past, including during the October 7 Hamas attack on Israel, where Bitcoin fell and gold rose. He further noted that during the Russian invasion of Ukraine in February 2022, Bitcoin's price movements were relatively random and confined to a tight range, whereas gold prices surged by 12% during the same period.
Despite recent challenges, Bitcoin has shown resilience, beginning its recovery early on April 15, with prices reaching $65,800. Elliott’s final take was clear, stating, "Along the geopolitical dimension, it's pretty conclusive BTC is not ‘digital gold.’”
This development underscores the complexity of cryptocurrency markets and the varied roles different assets may play in investors' portfolios, particularly in times of geopolitical uncertainty.
$BTC $PAXG
#Bitcoin #BTC #PAXG #Paxos

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#PayPal is launching its own #stablecoin option. PayPal is preparing to launch PayPal USD ( #PYUSD ).

PayPal USD (PYUSD) will be issued by #Paxos Trust Co. and will be fully backed by US dollar deposits, short-term treasury bonds and similar cash equivalents.

Global online payments giant PayPal has announced the launch of its own cryptocurrency stablecoin, PayPal USD (PYUSD), to expand its crypto services and give its customers more choice.

PayPal #USD is the Paxos Trust Co., a regulated trust company and custodian of digital assets. and will be fully backed by US dollar deposits, short-term Treasuries and similar cash equivalents.

Stablecoins are a type of cryptocurrency that are designed to maintain a stable value, often pegged to a traditional asset like a fiat currency (such as the US Dollar), a commodity (like gold), or other financial instruments. The primary goal of stablecoins is to mitigate the price volatility commonly associated with other cryptocurrencies like Bitcoin or Ethereum. This stability makes stablecoins useful for various applications, such as facilitating transactions, serving as a store of value, and enabling smart contracts on blockchain platforms. Here's a comprehensive overview of stablecoins:

Types of Stablecoins:

Fiat-Collateralized Stablecoins: These stablecoins are backed by reserves of traditional fiat currencies, typically held in a bank. Each issued stablecoin is pegged to a specific amount of the fiat currency, like 1:1 with the US Dollar. Examples include USDC (USD Coin), Tether (USDT), and TrueUSD (TUSD).

Commodity-Collateralized Stablecoins: These stablecoins are backed by physical assets like precious metals (e.g., gold) or other commodities. The value of the stablecoin is tied to the value of the underlying asset. Digix (DGX) is an example of a gold-backed stablecoin.

Crypto-Collateralized Stablecoins: These stablecoins are backed by other cryptocurrencies or digital assets. Users lock up a certain amount of cryptocurrency as collateral to mint stablecoins. MakerDAO's DAI is a well-known example, where Ether (ETH) is used as collateral.

Algorithmic Stablecoins: These stablecoins rely on smart contracts and algorithms to maintain their stability. They are not directly backed by any collateral but use mechanisms to control their supply and demand. Ampleforth (AMPL) is an example of an algorithmic stablecoin.

How Stablecoins Maintain Stability:

Collateral Reserve: In fiat and commodity-backed stablecoins, the stability is maintained by keeping reserves of the underlying asset to back the stablecoin issuance.

Over-Collateralization: In crypto-backed stablecoins like DAI, users must lock up more cryptocurrency than the value of the stablecoins they mint, creating a buffer against price fluctuations.

Algorithmic Adjustments: Algorithmic stablecoins use smart contracts to adjust the supply of coins based on market demand. If the price is too high, the smart contract may issue more coins, and if the price is too low, it may decrease supply.

Use Cases and Benefits:

Payments and Remittances: Stablecoins can be used for quick and low-cost cross-border payments and remittances, without the volatility associated with other cryptocurrencies.

Decentralized Finance (DeFi): Stablecoins are a cornerstone of DeFi platforms, enabling users to lend, borrow, trade, and earn interest on their assets without worrying about price fluctuations.

Smart Contracts: Stablecoins facilitate more predictable and reliable execution of smart contracts by minimizing the risk of price volatility during contract execution.

Store of Value: Users can use stablecoins as a digital store of value, preserving wealth without being exposed to the extreme price swings of other cryptocurrencies.

Challenges and Considerations:

Centralization Risk: Fiat-backed stablecoins are centralized as they rely on trusted custodians and banks to hold reserves.

Transparency and Auditing: Ensuring proper collateralization and auditing of reserves is essential for maintaining trust.

Regulatory Challenges: Stablecoins could face regulatory scrutiny, especially if they are perceived as acting like traditional financial instruments.

Smart Contract Risks: Algorithmic stablecoins are subject to potential vulnerabilities in their smart contract code.

Stablecoins have gained significant traction and play a crucial role in bridging the gap between traditional finance and the blockchain ecosystem. They offer stability and utility, making them valuable tools for various financial and commercial applications.

#USDC had a tough March when the US banking authorities intervened to take over Silicon Valley Bank (SVB). Furthermore, the loss of crypto-friendly banks has led in a decrease in the capitalization of Circle's stablecoin.

Circle, the issuer of USDC, announced that about $3.3 billion in cash reserves backing USDC are still held at Silicon Valley Bank, which was closed down by California banking authorities following a bank run.

Other, smaller-circulation stablecoins, such as #BUSD issued by #Paxos and crypto-backed stablecoin DAI produced by MakerDAO, also lost their pegs. Only USDT appears to benefit from the instability, briefly topping $1, most likely as a result of investors abandoning the depegged stablecoins.

The #crypto market has recovered dramatically in the weeks following the losses of several US banks as well as the Credit Suisse disaster, but the same cannot be said for USDC.

#Circle issued $600 million in USDC and redeemed $2.5 billion in USDC in the last 7 days, based upon official data, while circulation declined by around $1.9 billion.

As of March 30, the entire circulation of USDC was $32.6 billion, while the reserve was $32.8 billion, consisting of $4.4 billion in cash and $28.4 billion in short-term US treasury bonds.

However, the DeFi market has not suffered as a result. On March 11, Uniswap had $13.3 billion in volume, while Coinbase had $1.7 billion. This is what distinguishes DeFi platforms, which keep financial risk issues centralized.

There is also growing interest in researching potential remedies to stablecoin issues. Although USDC is still trading at the "stable" $1 peg, the reduction in circulation indicates that money has transferred to competing stablecoins such as USDT.

This news is republished from https://coinaquarium.io/