A new stablecoin called FDUSD is emerging as a strong competitor to established stablecoins like USDT and USDC. According to data from Kaiko, FDUSD now holds a market share of 16% across centralized exchanges, which is more than twice that of USDC.
USDT Remains Dominant
USDT, the most liquid stablecoin in the world, still maintains its dominance with a market share of 75%. It was the first stablecoin issued on the Omni Protocol and has gained momentum as an ERC-20 token on Ethereum. USDT is minted on various popular chains.
Other stablecoins like USDC, BUSD, TUSD, and DAI have smaller market shares ranging from 1% to less than 1%. The total stablecoin market cap stands at over $124.5 billion, with USDT having the highest market cap of $84.3 billion.
Rise of FDUSD and Fall of BUSD
The recent surge in FDUSD’s popularity coincides with a decline in BUSD. After the New York Department of Financial Services ordered Paxos to stop minting new BUSD, its market cap plummeted from $23.6 billion to $2 billion.
Regulatory Challenges for BUSD
BUSD was closely associated with Binance, the largest crypto exchange, before regulatory actions and lawsuits hit the exchange. The SEC has sued Binance and its CEO for listing unregistered securities, including BUSD.
TUSD’s Decline and FDUSD’s Rise
According to Kaiko, the rise of FDUSD coincides with the fall of TUSD. Binance stopped promoting TUSD and started favoring FDUSD, leading to a surge in trading volume for the new stablecoin.
Despite its growth, FDUSD is currently only listed on Binance, while other stablecoins like USDC and TUSD are available on multiple exchanges.
Hot Take: FDUSD Disrupting the Stablecoin Market
FDUSD’s rising market share and popularity among centralized exchanges indicate that it is becoming a significant player in the stablecoin market. Its competition with established stablecoins like USDT and USDC highlights the potential for disruption in this space. The decline of BUSD and TUSD further strengthens FDUSD’s position as a viable alternative. However, its limited availability only on Binance may hinder its wider adoption. It will be interesting to see how FDUSD continues to grow and whether it can expand its reach to other exchanges in the future.
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