BUSD stablecoin rate on Binance temporarily drops to $0,2
The sharp drop was triggered by a $647 000 market sell order
22.02.2023 - 15:30
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What’s new? On February 22, the rate of the Binance USD (BUSD) stablecoin significantly declined against the DAI stablecoin on the Binance crypto exchange. The sharp drop was triggered by a $647 000 sell order, which triggered a cascade of slippage to the $0,2 mark. BUSD then immediately regained its peg to the US dollar in a pair with DAI. The depegging may have been caused by a lack of liquidity or a pricing error that did not take into account remaining buy orders.
The BUSD stablecoin issued by Paxos under the Binance crypto exchange brand is the third largest in the crypto market after USDT and USDC and ranks ninth in the overall cryptocurrency ranking with a capitalization of $12,3 billion.
What is going on with BUSD? On February 13, the New York State Department of Financial Services (NYDFS) ordered Paxos to stop issuing new BUSD. The US Securities and Exchange Commission (SEC) said that BUSD is an unregistered security and intends to hold Paxos liable for issuing the asset and violating investor protection laws.
Binance CEO Changpeng Zhao commented on the ban on the issuance of BUSD, saying that the asset is fully owned and operated by Paxos, and the company will continue to service all operations with it. Binance will also support BUSD for the foreseeable future. However, the exchange’s CEO acknowledged that BUSD users would gradually migrate to other assets.
Zhao later urged crypto businessmen who are serious about their projects to move to countries with favorable regulation: the UAE, France, and Bahrain.
The community of the Aave DeFi protocol suggested freezing BUSD on the platform because the supply of the asset would trend toward zero, which could “hurt peg arbitrage opportunity and asset peg.”
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