​Curve DeFi protocol token rises by 14% after the termination of the BUSD issue

What’s new? On February 14, the native token of Curve (CRV), a DeFi protocol, rose by 14,81% amid an increase in demand for decentralized stablecoins. Interest in them grew after the New York State Department of Financial Services (NYDFS) banned fintech company Paxos from issuing new Binance USD (BUSD) stablecoins. Interestingly, Curve is still just getting ready to launch its own Curve USD (crvUSD) stablecoin. Curve’s plans to create a dollar-pegged asset first became known in June 2022, CoinDesk reports.

Binance’s data

What is known about Curve and BUSD? Curve.Finance is a decentralized exchange (DEX) and automated market maker (AMM) for trading stablecoins and wrapped digital assets like wBTC. The total value locked (TVL) is $4,77 billion, according to DefiLlama. CRV ranks 59th in the cryptocurrency ranking with a capitalization of $779 million and is trading at $1,04.

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 seventh in the overall cryptocurrency ranking with a capitalization of $15,68 billion.

Details on the launch of crvUSD. On February 13, the DeFi protocol’s team hinted at an upcoming stablecoin release by launching a vote on a proposal that would allow stablecoin pools to provide price data to external protocols. The developers added that its implementation “is required for crvUSD to function autonomously.”

Needless to say - this is required for crvUSD to function autonomously https://t.co/GFA5aXAjv0 — Curve Finance (@CurveFinance) February 13, 2023

This development likely served as a catalyst for traders, as demand for CRV increased and the volume of tokens traded on crypto exchanges exceeded $770 million.

In addition, allegations against Paxos and BUSD by the US Securities and Exchange Commission (SEC) may also have caused bearish sentiment toward centralized stablecoins, and traders likely began looking for decentralized counterparts that are less likely to face legal repercussions in the future. For example, the regulator considers BUSD an unregistered security and intends to hold Paxos liable for issuing the asset.

Earlier, Marc Zeller, a member of the Aave DeFi protocol community, suggested freezing BUSD on the platform after the SEC lawsuit. He explained that since no new coins were being issued anymore, the supply of the asset would trend toward zero. Changpeng Zhao, the head of Binance, earlier announced a gradual reduction in BUSD’s capitalization. However, he added that the exchange will support the asset for the foreseeable future.