Binance USD’s (BUSD) market cap has fallen below $10 billion for the first time in almost two years amid a United States regulatory crackdown on its token issuer and a planned delisting from a major crypto exchange.BUSD’s market cap has been on a steep downward trajectory since its all-time high market cap of $23.49 billion, which it hit on Nov. 15, just a few days after the shock collapse of FTX.As of March 3, the stablecoin’s market cap has fallen to $9.66 billion — levels not seen since June 29, 2021.Market cap of Binance USD (BUSD) over the last 12 months. Source: CoinGecko.Most recently, BUSD has been the subject of a potential lawsuit against Paxos by the United States Securities Exchange Commission on Feb. 12 over a possible violation of investor protection laws. Since then, $6.65 billion has been shaved off BUSD’s market cap.Paxos was also ordered by the New York District of Financial Services to stop minting and issuing BUSD on Feb. 12 as well, which has likely contributed to the stablecoin’s market cap fall.Earlier this week, cryptocurrency exchange Coinbase announced that it would be delisting BUSD from its exchange on March 13 because the stablecoin “no longer met our listing standards,” a Coinbase spokesman told Cointelegraph. The wider crypto market has also seen a fall in market cap, with many pointing to the recent controversy surrounding Silvergate Bank with the late filing of its annual 10-K financial report on March 1.Related: Unstablecoins: Depegging, bank runs and other risks loomUpon its launch in September 2019, the Binance-branded stablecoin quickly surged to become the third-largest stablecoin, behind Tether (USDT) and USD Coin (USDC).The stablecoin is currently in 10th position in terms of market cap across all cryptocurrencies. The next crypto token on the list is Solana (SOL), with $7.98 billion in market cap.The largest stablecoins by market cap. Source: CoinMarketCapInterestingly, Binance CEO Changpeng “CZ” Zhao stated in a Feb. 14 Twitter Spaces event that he never thought very highly of the Binance stablecoin project, adding that he thought it “may fail” when it first rolled out. BUSD market cap dropped -$2.45B (from 16.1B to 13.7B as of now), and most of it has moved to USDT. USDT marketcap + 2.37B (From 67.8B to 70.1B)USDC also declined -739M (from 42.3B to 41.5B)Landscape is shifting.(Note: BUSD is NOT issued by Binance.) pic.twitter.com/kVrZUYjuOh— CZ Binance (@cz_binance) February 17, 2023
To account for the fall in demand for BUSD, Binance recently minted nearly $50 million worth of TrueUSD (TUSD) as the cryptocurrency exchange looks to diversify its stablecoin holdings.