Who owns the most Binance USD crypto? BUSD tokens on march to dominate stablecoin market

Binance USD is the seventh largest cryptocurrency, with a market capitalisation of over $21bn, as of 1 October 2022. It is the third largest stablecoin by market capitalisation after USDT and USDC, which are valued at about $68bn and over $49bn, respectively.

BUSD is pegged to and collateralised by the US dollar. It is issued on multiple blockchain networks, including Ethereum (ETH), BNB Chain (BNB), Polygon (MATIC) and Avalanche (AVAX).

Binance USD was created in 2019 by a collaboration between cryptocurrency exchange Binance and blockchain infrastructure company Paxos.

Paxos is the USD custodian and issuer of BUSD. The company is responsible for performing regular audits to ensure the US dollar reserves held are equal to the supply BUSD at a 1:1 ratio.

According to Binance, BUSD provides a monthly audited report of USD reserves in compliance with regulatory standards.

The Paxos website claims its stablecoin operations are regulated by the New York State Department of Financial Services as a trust company.

Data from CoinGecko showed BUSD was the fourth-most available stablecoin on the market, with 132 centralised and decentralised crypto exchanges listing BUSD, as of 30 September. It was behind USDT, USDC and DAI on the data provider’s list.

Who owns the most Binance USD?

USD is issued on the Ethereum blockchain as an ERC-20 token and on the BNB chain as a BEP-20 token. As of October 2022, the majority of BUSD in circulation were on Ethereum.

We can learn who the biggest Binance USD holders are. So, who has the most Binance USD?

Blockchain data on EtherScan revealed that a wallet address identified as Binance was the biggest holder of BUSD, with holdings worth $12.3bn, equal to 58% of the stable coin’s circulating supply on Ethereum, as of 1 October 2022.

Of the five top holders of Binance USD, only one was not identified as belonging to Binance. The unidentified wallet address held BUSD worth $1.64bn.

Binance-linked wallet addresses held BUSD worth over $18bn, representing over 85% of BUSD circulating on the Ethereum blockchain.

On the BNB Chain, an unidentified wallet was the largest BUSD holder, with holdings worth $1.01bn, BscScan data showed.

It should be noted that while blockchain data is transparent and wallet balances are viewable to the public, the identity of the wallet address holder remains anonymous.

Tokenomics: BUSD

Stablecoins like BUSD do not have a capped supply. A BUSD is issued for every one US dollar of customer deposit.

As of 1 October, the circulating supply of BUSD stood at over 21.04 billion tokens, data from CoinMarketCap showed.

In early September 2022, Binance announced that it was removing support for the USDC, Pax Dollar (USDP) and TrueUSD (TUSD) stablecoins on all its products.

The world’s biggest cryptocurrency exchange said it will convert the existing user balance of unsupported stablecoins to BUSD by the end of September 2022.

USDT, the biggest stablecoin on the market, had a circulating supply of 67.98 billion coins, ahead of second-placed USDC and its circulating supply of 49.19 billion coins.

DAI – an overcollaterised crypto-backed stablecoin pegged to USD – was the fourth largest stablecoin and had a circulating supply of 6.9 billion, as of 1 October 2022.

Stablecoins play an important function in bridging the traditional financial system and the decentralised digital blockchain world. The market capitalisation and supply of stablecoins could increase on the back of the growing popularity and adoption of cryptocurrencies.

CoinMarketCap data showed the current market cap of the stablecoin sector stood at $152.2bn, equal to over 16% of the global crypto market cap, as of 28 September.

As of 1 October 2022, EtherScan data showed there were about 133,166 Binance USD holders on the Ethereum network, while BscScan data showed there were over 3.95 million Binance USD holders on the BNB Chain.

Stablecoin regulations: BUSD ownership continues to rise

The ownership of stablecoins like BUSD has grown amid the rise of cryptocurrencies. The rise of stablecoins in recent years has alarmed central banks and authorities. They have stepped up efforts to regulate the sector and explore the development of central bank digital currencies (CBDCs).

In November 2021, the US Department of the Treasury published a report wherein the agency presented risks posed by stablecoins to financial systems and the broader economy, noting:

Following the collapse of algorithmic stablecoin TerraUSD (UST) in May 2022, stablecoin regulation has come under the spotlight.

Japan became the first nation to introduce stablecoin regulations in June. The new Japanese law stated that only licensed banks, registered money transfer agents and trusted businesses can issue stablecoins. The bill also stated that stablecoins must guarantee holders the ability to redeem the asset at face value.

In September 2022, the US Department of the Treasury published another report calling for “appropriate regulation and oversight of stablecoins and stablecoin arrangements” to address the risks posed by stablecoins.

The report cited financial risks to consumers and investors, insufficient or illiquid stablecoin reserves, credit risk, money laundering and terrorism financing risks posed by stablecoins.

Moreover, authorities in several regions, including the US, EU, China, and India, are developing CBDCs in a bid to counter the growth of cryptocurrencies and stablecoins. It remains to be seen whether CBDCs will pose a threat to stablecoin market growth.

“Most likely there will be some form of coexistence,” said consulting firm McKinsey & Company in an October 2021 report.

“Ultimately the fate of CBDCs and stablecoins may be decided by the significant forces of regulation and adoption.”

Furthermore, Binance’s decision to convert all customer holdings of USDC, USDP and TUSD to BUSD has been called “uncompetitive” by its critics and has highlighted the lack of regulation in the sector.

“Binance’s auto-conversion of USDC isn’t unprecedented, but it might be anti-competitive. The probability that traders will bother to convert away from BUSD is low when it’s all worth $1 anyway – but without any regulators, who’s left to object?” tweeted Bloomberg journalist, Emily Nicolle.

Stablecoin ownership statistics should not be the key reason behind your decision to buy a cryptocurrency. Whether USDC is a good investment for you should depend on your investment goals, risk tolerance, and the size of your portfolio. It is important to do your own research before making any investment or trading decision. And never invest or trade money that you cannot afford to lose.

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