Over the past 90 days, the industry has experienced significant upheaval due to a series of dramatic events:
🔻Collapse of FTX cryptocurrency exchange
🔻Collapse of Silvergate Bank (crypto-friendly)
🔻Collapse of Silicon Valley Bank
🔻Shutdown of Signature Bank by federal regulators (crypto-friendly)
🔻Rescue of Credit Suisse Bank via UBS takeover
Contagion has spread relentlessly among companies and financial institutions. Additionally, U.S. regulators have taken legal action against the largest cryptocurrency exchange, Binance, and its stablecoin, BUSD.
These events have reshaped the stablecoin market, now worth over $120 billion, and reinforced the position of the leading stablecoin. Here is a summary of the market valuations of the largest stablecoins over the last 90 days:
🔺Tether: $80 billion (+21%)
🔻USD Coin: $33 billion (-26%)
🔻Binance USD: $7.6 billion (-29%)
USDC had a portion of its reserves in the collapsed Silicon Valley Bank. Although the company has received its deposit back from authorities, it has yet to regain customers’ trust.
The U.S. Securities and Exchange Commission is putting pressure on Paxos, the company responsible for issuing the Binance USD stablecoin. Furthermore, U.S. regulators are suing the crypto exchange Binance and its CEO, Changpeng Zhao.
As the BUSD stablecoin faces legal challenges, its future remains uncertain, which is reflected in its market capitalization.
However, the outlook for its competitor, USDC, appears brighter. USDC has regained share in the DeFi protocol Curve’s 3pool exchange pool, a crucial infrastructure for supporting stablecoin trading. This surge suggests that pressure on the token has eased.
