Binance has recently created approximately $50 million worth of TrueUSD (TUSD) just days after news surfaced that Paxos and Binance USD (BUSD) were being reviewed by US regulatory authorities. On February 16th, two days after CZ, Binance CEO stated on Twitter that Binance would seek to “diversify” its stablecoin holdings away from BUSD, Etherscan data showed that the transaction had been initiated.
CZ had previously mentioned that the recent regulatory action by the US Securities Exchange Commission and the New York Department of Financial Services might eventually result in a decline in the dominance of US dollar-backed stablecoins. Despite this, Binance managed to mint almost $50 million in TUSD from the TrustToken platform’s smart contract.
In response to the current regulatory waves, CZ stated that the industry will probably shift to a non-US dollar-based stablecoin, returning to algorithmic stablecoins. He further added that multiple agencies are putting pressure, and this will decrease the US dollar-based stablecoin market.
CZ stated that Binance is now investigating alternative options for stablecoins, including exploring new stablecoins based on the euro and the Japanese yen. While the CEO mentioned that Binance would extend greater support for USD Coin (USDC) and Tether (USDT), he also mentioned that BUSD would “wind down over time.” Interestingly, the Binance CEO also said that he was never overly optimistic about the BUSD stablecoin’s success, indicating that when they started, he thought the BUSD project might fail.
inance has previously auto-converted TUSD to BUSD in September to improve liquidity and capital efficiency for its users. This move increased BUSD’s market share in stablecoins from 10% to 15% in just a few weeks. TUSD was introduced by TrustToken in 2018 and is present on the Tron, Polygon, Avalanche, and Ethereum networks.
Overall, Binance’s move to create TUSD indicates its continued efforts to diversify its stablecoin holdings and explore new options as the regulatory landscape evolves.
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