Binance Stablecoin Flipped By Cardano, Polygon As Billions Burn

Binance branded stablecoin BUSD has given up its seventh spot on crypto market cap leaderboards, as the SEC’s threat to Paxos looms

article-image

Binance CEO Changpeng Zhao | Stephen McCarthy/ for Web Summit/"Changpeng Zhao" (CC license) modified by Blockworks

share

Binance-branded stablecoin BUSD has taken a beating since issuer Paxos confirmed receipt of an ominous Wells notice from the SEC, falling to ninth place on crypto market cap leaderboards.

BUSD is now worth less than the native token for prominent blockchain cardano (ADA). The dollar-pegged token is currently jostling polygon (MATIC), which powers the Layer-2 Ethereum network of the same name, for the eighth spot.

MATIC has flipped BUSD several times over the past few days, but at press time, MATIC is $65 million ahead of BUSD, per data from The TIE.

If MATIC falls even slightly from here, BUSD could very well reflip the token, but additional reductions in BUSD supply would jeopardise its position.

BUSD has shed about 20% circulating supply since reports of the SEC’s intent to sue first surfaced on Feb. 12. 

SEC regulators have informed New York-headquartered Paxos it considers BUSD a security, which should’ve been registered before being sold to US investors.

Paxos quickly announced it would pause all new token issuances, effectively ceasing sale of fresh BUSD to customers. The firm also said it would cut ties with Binance, leaving the stablecoin in limbo.

There was as much as $23.5 billion in BUSD circulating the crypto ecosystem at its peak in mid-November as crypto exchange FTX blew up. That figure is now $12.8 billion.

Blockchain data reviewed by Blockworks shows Paxos burning almost $3.5 billion BUSD across that time, indicating the firm had redeemed an equivalent amount for US dollars (Blockworks has reached out for comment).

Still, BUSD remains the third-largest stablecoin by market value, behind tether (USDT) and USD coin (USDC), which boast $70.4 billion and $41.9 billion, respectively. Fourth-place DAI, the decentralized stablecoin stewarded by MakerDAO, has around $5.2 billion.

But which cryptocurrencies might flip BUSD next? If prices stayed flat, Paxos would need to reduce BUSD’s supply by a further $1.11 billion to be under threat of dogecoin (DOGE). 

An additional $1.84 billion would need to be burned to be eclipsed by solana (SOL).


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template.png

Research

The march toward an interoperable and onchain-by-default internet depends on reliable messaging and value transfer across heterogeneous domains. Crosschain protocols now process >$1.3T in combined annual transfer volume and secure tens of millions of user interactions, yet no single design dominates.

article-image

The goal, per Santiago Santos, is to make crypto a relatable piece of tech for people who may not even understand it

article-image

Stripe stablecoin unit aims to operate under a federal charter enabling regulated stablecoin issuance and custody services

by Blockworks /
article-image

Will TradFi make crypto better or create more problems than it solves?

article-image

Subtle decisions by risk curators saved Aave from significant turmoil

article-image

The new Rootstock Institutional unit aims to connect professional investors to Bitcoin-native yield and liquidity strategies anchored in BTC’s security layer

by Blockworks /
article-image

DOJ files record civil forfeiture against more than 127,000 BTC linked to scam activity

by Blockworks /