The First Digital USD (FDUSD) stablecoin has recorded a significant rise in its market cap following an announcement by the Binance exchange in August. FDUSD, a dollar-pegged stablecoin, was recently launched on June 1, 2023, debuting on the Ethereum network and the BNB Smart Chain. The token was officially listed for specific trading pairs on the crypto exchange in July.
Binance’s Directive Drives Adoption Of FDUSD
On August 31, Binance confirmed reports of intention to halt support for Binance USD (BUSD) stablecoin following the regulatory embargo on the token’s issuance.
Back in March, The New York Department of Financial Services (NYDFS) had ordered Paxos Trust, the issuing company of BUSD, to cease minting the stablecoin. Since then, BUSD’s market supply has taken a nosedive, crashing by over 80% in the last eight months.
According to an official post, the exchange will begin the gradual termination of all BUSD products on its platform, urging its 150 million customers to swap their BUSD tokens for other assets before February 2024.
In particular, the crypto exchange encouraged users to convert their BUSD to FDUSD, touting incentives such as zero trading fees and a 1:1 direct swap ratio.
According to data from CoinMarketCap, FDUSD’s market cap value has grown by 21.49% from August 31, rising from $324.75 million to its current value of $394.68 million.
This indicates that Binance’s promotion of FDUSD as a BUSD alternative is paying dividends, resulting in a rapid rise in the former’s adoption over the last few days.
For context, the market cap metric represents the total value of a cryptocurrency based on its market price and the number of circulating tokens. Since FDUSD is a stablecoin with a fixed value of $1, CoinMarketCap’s data means that over 70 million FDUSD tokens entered circulation over the past week.
In addition, according to the DeFi analytics platform, DeFiLlama, FDUSD now ranks as the ninth largest stablecoin in the crypto market ahead of other popular assets such as Gemini USD (GUSD).
FDUSD valued at $0.9992 on the hourly chart | Source: FDUSDUSDT chart on Tradingview.com
Binance Announces New FDUSD Trading Pairs
In other news, Binance unveiled three new FDUSD trading pairs on September 6, maintaining its stablecoin support.
These trading pairs are DOGE/FDUSD, SOL/FDUSD, and XRP/FDUSD, which will become available for trading on September 7 at exactly 08:00 UTC.
This move comes a week after Binance announced the “gradual” discontinuation of its support for the BUSD token while directing users to convert their BUSD token to other assets. The exchange has begun discontinuing by delisting eight BUSD isolated and cross-margin pairs.
Following these announcements, the BUSD market fall continues, with the token’s market share now valued at an all-time low of $2.73 billion. More data from DeFiLlama shows that the BUSD market cap is down by 4.16% and 12.23% in the last one and seven days, respectively.
Nevertheless, BUSD remains an important item in the market, ranking as the fifth largest stablecoin in the crypto space.
Feature image from CNBC, chart from Tradingview