In late 2019, a new kind of stablecoin quietly entered the digital finance scene. Unlike the flashy altcoins promising moonshots, Binance USD, or BUSD, was all about stability, trust, and transparency. It was born from a collaboration between crypto giant Binance and the regulated fintech firm Paxos, aiming to bridge the gap between traditional finance and the decentralized world.

Fast forward to 2025, and the narrative has shifted. Once considered a top-tier stablecoin, BUSD is now grappling with regulatory pushback, declining issuance, and shifting market dynamics. This report dives deep into the numbers to uncover what’s really happening with BUSD, and where it might be headed next.

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BUSD’s market cap has plunged from $16.1 billion in January 2023 to just $1.6 billion by Q1 2025, marking a 90% decline in just over two years.

As of March 2025, Binance USD accounts for less than 0.7% of the overall stablecoin market.
In February 2023, Paxos announced it would cease the issuance of new BUSD tokens under NYDFS direction.
Despite its decline, over $6 billion in BUSD trades were still executed globally in Q4 2024.
At its peak in late 2022, BUSD made up 35% of Binance’s stablecoin reserves, a figure that now stands at under 2%.
Regulatory concerns in the U.S. caused Binance to shift its stablecoin strategy toward FDUSD and USDT by mid-2024.
CoinMarketCap now ranks BUSD as the 9th-largest stablecoin by market cap, down from 3rd place in 2022.

How Binance USD Works

Binance USD is a 1:1 USD-backed stablecoin issued by Paxos Trust Company under New York State regulation.
For every BUSD token issued, Paxos held an equivalent USD or short-term US Treasury in reserve.
Unlike algorithmic stablecoins, BUSD relies on fiat-backed collateralization, enhancing redemption reliability.
Users could mint and redeem BUSD directly via Paxos.com, while secondary trading occurred on platforms like Binance, Huobi, and KuCoin.
BUSD operates on both Ethereum (as an ERC-20 token) and Binance Smart Chain (as a BEP-20 token).
Unlike algorithmic peers, BUSD held no governance token and had limited DeFi exposure.
Binance automatically converted users’ USDC, USDP, and TUSD balances into BUSD during parts of 2022–2023, bolstering liquidity.

Demographic Insights on Binance US Users

Male dominance is clear among Binance US users, with 69.57% identifying as men, while only 30.43% are women.
The largest age group using Binance US is 25–34 years, accounting for approximately 31% of the user base.
Young adults (18–24 years) represent about 12% of users, indicating growing early interest in crypto.
Users aged 35–44 years make up 22%, showing strong engagement from mid-career professionals.
The 45–54 age group holds a significant share as well, contributing 17% of the user population.
The 55–64 years segment comprises around 10%, showing moderate interest among older adults.
Only about 8% of users are 65 years or older, suggesting minimal adoption in the senior demographic.

A Brief History of Binance USD

Binance USD was launched in September 2019 as a joint initiative between Binance and Paxos.
In its first year, BUSD grew to over $1 billion in market cap, driven largely by its close integration with Binance’s ecosystem.
By mid-2022, BUSD reached a market cap of $21 billion, ranking third among stablecoins behind only USDT and USDC.
Regulatory pressure began mounting in 2023, particularly after Paxos received a Wells Notice from the SEC in February 2023.
On February 13, 2023, Paxos stopped minting new BUSD tokens, but redemptions remained available to users holding existing tokens.
Binance slowly phased out BUSD trading pairs, removing more than 30 pairs by late 2023.
The decline in issuance and growing favor toward FDUSD (First Digital USD) led to a rapid BUSD market share erosion.
As of 2025, BUSD is in a sunset phase, with Paxos continuing to honor redemptions while encouraging users to migrate.

Binance USD Circulating Supply Trends

At its peak in late 2022, BUSD’s circulating supply reached over $23 billion.
As of March 2025, BUSD’s circulating supply has dropped to just under $1.5 billion.
The largest single-month supply reduction occurred in February 2023 when $5.3 billion worth of BUSD was redeemed.
Between Q2 2023 and Q2 2024, BUSD lost an average of $1 billion in supply per quarter.
Whale wallet redemptions accounted for more than 60% of supply outflow between March and July 2023.
Smart contract activity involving BUSD dropped by 80% in 2024, reflecting a decline in DeFi utility.
The total number of active BUSD wallets shrank from 1.1 million in 2023 to under 250,000 in 2025.
Binance removed the automatic conversion of USDC to BUSD in October 2023, accelerating the supply decline.

Trading Costs vs. Market Share of Crypto Exchanges

Binance leads the market with the largest spot market share (22%) and lowest trading costs, well below the industry average.
The weighted industry cost for trading is marked at 0.80%.
Exchanges like Bybit, Coinbase, and Bitget follow in market share (each around 6–8%) but have higher trading costs than Binance.
Bitstamp and Bitpanda have minimal market share, yet their trading costs exceed 2%, making them less cost-effective options.
Robinhood shows negligible trade costs but also a very low market share.
Deribit, Upbit, Bithumb, Crypto.com, and Kraken sit below the industry average market share, with varied trade fees mostly near or above the 0.80% benchmark.

Market Capitalization Overview

BUSD’s market cap peaked at $23.4 billion in November 2022.
By January 2024, the market cap had fallen below $5 billion, signaling a sustained decline.
As of March 2025, BUSD’s market capitalization is estimated at $1.62 billion.
In contrast, FDUSD, Binance’s new favored stablecoin, has surpassed $4.8 billion in market cap.
Tether (USDT) maintains dominance with over $100 billion, while USDC holds ~$28 billion.
BUSD represented 0.65% of all stablecoin value in circulation in early 2025, compared to 10% in 2022.
Binance has removed over 85% of BUSD trading pairs, reducing market exposure and suppressing demand.
The analyst consensus suggests BUSD will exit the top 10 stablecoins by Q3 2025.

Binance USD Usage in Trading Pairs

As of early 2023, BUSD was paired with over 300 assets across Binance’s spot and futures markets.
By Q1 2025, fewer than 25 active trading pairs will still feature BUSD, reflecting a sharp reduction.
In January 2023, BUSD was involved in 26% of Binance’s total trading volume. That figure dropped to under 3% by February 2025.
The BUSD/USDT pair once ranked among the top 10 most-traded stablecoin pairs but has now fallen out of the top 50.
BTC/BUSD and ETH/BUSD were delisted from major platforms like Binance US by mid-2024.
BUSD trading volume dropped from $12 billion/day in early 2023 to under $900 million/day in 2025.
On DEXs, BUSD saw a 91% decline in monthly volume from January 2023 to January 2025.
Binance Futures removed BUSD-margined contracts for top cryptos like SOL and MATIC in late 2023.
Automated market makers (AMMs) like PancakeSwap now prioritize FDUSD and USDT, pushing BUSD further out of DeFi activity.
BUSD gas incentives and rebates offered in 2022 have long expired, reducing their appeal for market makers.

Top Cryptocurrency Exchanges by Trading Volume

Binance dominates the global crypto exchange space with a staggering $8.98 billion in daily trading volume ,nearly 4x more than its closest competitor.
Bybit ranks second with a solid $2.36 billion, followed closely by OKX ($2.22B), Upbit ($2.2B), and IndoEx ($2.2B).
SuperEx also performs competitively with $2.19 billion in volume.
Coinbase Exchange, one of the leading U.S.-based platforms, holds $1.88 billion in daily trading.

Other notable platforms with over $1 billion in daily trading volume include:

Bitrue – $1.86B
BitForex – $1.56B
MEXC – $1.55B
WhiteBIT – $1.5B
CoinW – $1.4B
Bitget – $1.37B
Bithumb – $1.33B
HTX – $1.28B
Bullish – $1.07B
Kraken, OrangeX, and Gate.io – each at $1.04B
BitMart – $1.02B

Top Cryptocurrency Exchanges by Trading Volume — *(Reference: Moneyzine)*

Exchange Listings and Supported Platforms

In 2021–2022, BUSD was supported by over 60 global exchanges, including Binance, Kraken, KuCoin, and Gate.io.
By March 2025, only a handful of exchanges, including Binance, OKX, and BitMar, will still list BUSD.
Coinbase delisted BUSD in March 2023, citing regulatory uncertainties.
Kraken removed BUSD support by August 2023, redirecting users to USDC and USDT pairs.
Trust Wallet removed BUSD swap functionality by mid-2024 as demand dwindled.
eToro and Robinhood never integrated BUSD, citing limited fiat gateways and regional restrictions.
DeFi aggregators like 1inch and Matcha de-prioritized BUSD routes in early 2024.
Uniswap V3 pools for BUSD have seen a 75%+ liquidity withdrawal rate since 2023.
Major custodians like Fireblocks and BitGo reduced BUSD integrations in 2024, favoring newer stablecoins.
MetaMask swaps deprioritized BUSD pairs as of early 2025, with user activity nearly negligible.

Binance USD Peg Stability and Mechanism

Throughout its lifespan, BUSD maintained a tight peg of $1.00 with deviation margins typically under 0.002%.
Even during the LUNA and FTX crashes, BUSD traded within a ±0.1% band, highlighting strong peg resilience.
In February 2023, after Paxos halted issuance, BUSD briefly dipped to $0.998 but recovered within hours.
The 1:1 reserve model, regularly attested by Paxos, contributed to the currency’s historical stability.
Monthly attestation reports confirmed 100% cash and cash-equivalent reserves for BUSD from 2019 to 2023.
Unlike Tether (USDT), BUSD did not rely on commercial paper or corporate debt in its reserves.
Peg maintenance was ensured through automated redemption mechanics, available on Paxos until mid-2024.
In DeFi, BUSD liquidity pools retained tight peg adherence despite reduced volume and incentives.
The price volatility of BUSD in 2024 remained under a 0.05% daily deviation, outperforming TUSD and USDD.
The token’s peg resilience contributed to its early adoption among institutional traders seeking minimal slippage.

Binance vs. Competitors – Futures Volume (Jan–Mar 2025)

Binance led all months with $1.08T (Jan), $717.5B (Feb), and $498.9B (Mar) in futures volume.
Bybit followed with $509.1B, $275.4B, and $173.2B, respectively.
OKX rose steadily, ending with $714.8B in March.
Coinbase ranged from $310B (Jan) to $107.6B (Mar).
Bitget grew from $295.2B (Feb) to $214.8B (Mar).
Kraken held steady at around $113B/month.
Bitfinex stayed low, peaking at $25.6B in March.
Crypto.com hit $56.5B in Feb but declined in March.
Deribit and Bitmex remained under $10B monthly.

Regulatory Actions and Impact on BUSD

In February 2023, the New York Department of Financial Services (NYDFS) ordered Paxos to stop issuing BUSD.
The SEC issued a Wells Notice to Paxos, citing BUSD as a potential unregistered security.
Senator Elizabeth Warren publicly criticized BUSD’s growth in late 2022, pushing regulatory scrutiny forward.
Paxos halted BUSD minting on February 21, 2023, but continued redemptions throughout 2024.
Binance US proactively removed BUSD trading pairs to mitigate compliance risk.
By Q2 2024, most US-based platforms had fully delisted BUSD to avoid regulatory exposure.
Binance began shifting promotional focus to FDUSD, a stablecoin seen as more regulatory-compliant.
In early 2024, BUSD was referenced in multiple Congressional hearings on stablecoin oversight.
Despite regulatory roadblocks, Paxos was never charged by the SEC as of early 2025.
US regulators increasingly advocate for stablecoins to be issued only by insured depository institutions, excluding firms like Paxos.

Comparison with Other Stablecoins

In 2022, BUSD held third place in stablecoin market cap behind Tether (USDT) and USD Coin (USDC).
As of 2025, BUSD ranks ninth behind newer entrants like FDUSD, PYUSD (PayPal USD), and EURe.
USDT currently holds over $104 billion in market cap compared to BUSD’s $1.6 billion.
The USDC has maintained relative stability, with a 2025 market cap near $28 billion.
FDUSD, Binance’s newer stablecoin partner, has surged past BUSD with $4.8 billion in market cap.
DAI, a decentralized stablecoin, has seen a resurgence with $7.5 billion in circulation.
TUSD, which once competed with BUSD, has struggled due to transparency concerns and is now below $800 million in market cap.
BUSD has the highest redemption-to-mint ratio of any stablecoin over 2 years: over 92% of its supply has been redeemed since 2023.
Algorithmic stablecoins like USDD and Frax have struggled to maintain pegs, while BUSD has retained high peg consistency throughout its lifespan.

Binance Traffic by Country – Who Visits the Most?

Turkey leads with the highest share of Binance visitors at 5.95% of total global traffic.
Russia follows closely, contributing 5.49% of the platform’s user visits.
Argentina ranks third with 4.56%, showing strong crypto interest in Latin America.
Ukraine comes in next with 4.28% of traffic, despite ongoing geopolitical challenges.
Vietnam rounds out the top five with 4.12% of total Binance visitors.

Binance USD Reserves and Transparency Reports

Paxos Trust issued monthly BUSD attestation reports from 2019 until mid-2023, confirming 100% reserve backing.
Reserves were held in FDIC-insured U.S. banks and short-term U.S. Treasury bills, avoiding commercial paper entirely.
As of January 2023, Paxos held over $16 billion in reserves, matching the total BUSD supply.
After Paxos stopped minting in February 2023, the reserves steadily declined with each user redemption.
By Q1 2025, the total BUSD reserves stand at approximately $1.5 billion, matching the circulating supply.
No BUSD was ever reported as being under-collateralized, unlike USDT during certain quarters in 2021–2022.
Paxos’ attestation partner, Withum, certified every monthly report up until mid-2023, with a final cumulative audit published in Q4 2024.
Binance.com ceased public reporting on BUSD trading activity by August 2024, further signaling its deprecation.
Unlike newer competitors like PYUSD, BUSD did not publish real-time reserve dashboards.
Paxos has maintained its commitment to redemptions at $1 per BUSD without deviation or redemption caps.

Binance and Paxos Partnership Overview

The collaboration between Binance and Paxos began in 2019, making BUSD one of the few regulated stablecoins approved by the NYDFS.
Paxos provided the issuance and custody infrastructure, while Binance integrated BUSD across its ecosystem for trading and payments.
Binance heavily promoted BUSD between 2020 and 2022, offering zero-fee trading and incentivized liquidity programs.
Following U.S. regulatory pressure, the relationship between Binance and Paxos grew strained in early 2023.
In February 2023, Paxos ended the issuance of BUSD under regulatory direction, effectively dissolving its active partnership with Binance.
Binance gradually shifted its stablecoin strategy to favor FDUSD, which was launched by First Digital Group in mid-2023.
Paxos officially removed BUSD branding from its homepage and redirected users to other regulated assets by 2024.
Binance has since reduced BUSD branding visibility on the platform, favoring new listings denominated in USDT or FDUSD.
Despite ending issuance, Paxos continues to honor BUSD redemptions, ensuring a smooth exit process for holders.
No legal action was taken against either Binance or Paxos regarding the BUSD issuance as of March 2025.

Binance Coin Price Forecast 2025–2031

In 2025, BNB is predicted to range between $780 (min) and $1,150 (max).
By 2026, the price is expected to hit $1,370 (min) to $1,900 (max).
2027 projections rise to $2,120 – $2,540, showing strong growth.
In 2028, BNB could climb further to between $2,750 and $3,180.
2029 predictions suggest a range of $3,500 – $3,960.
For 2030, BNB is forecasted between $4,200 (min) and $4,680 (max).
By 2031, Binance Coin could reach as high as $5,300, with a base around $4,900.

Notable Wallet Addresses Holding BUSD

In early 2023, over 1.1 million active wallet addresses held BUSD, many of them concentrated in centralized exchanges.
As of 2025, fewer than 250,000 wallets retain BUSD balances.
The top 10 BUSD wallet addresses control over 45% of all remaining BUSD, most linked to centralized exchanges like Binance and Bitfinex.
One Binance cold wallet still holds over $320 million in BUSD, primarily for ongoing redemptions.
Institutional custodians like Anchorage and Fireblocks reportedly reduced BUSD exposure by over 90% in 2024.
BUSD contract activity has declined sharply: only ~2,000 transactions/day in Q1 2025 vs. ~85,000/day in 2022.
Large DeFi whales exited BUSD liquidity pools in early 2024, moving to DAI or USDC-based yield strategies.
Whale alerts show consistent $5–10 million redemptions/week since February 2023.
Few known DeFi protocols still offer rewards in BUSD; Aave and Compound removed support entirely in 2024.
Binance Smart Chain (BSC) block explorers show that most remaining BUSD holders are passive wallets, likely awaiting redemption.

Institutional vs Retail Usage Trends

In its prime, BUSD saw heavy institutional usage, particularly for high-frequency trading and arbitrage on Binance.
In Q2 2022, institutional traders accounted for over 70% of the BUSD transaction volume.
Retail users were driven to BUSD through Binance promos, including zero-fee spot trading and staking programs.
By 2024, institutional redemptions will have outpaced retail by 4:1, signaling faster offboarding from funds and trading desks.
Retail wallet holdings dropped 68% between Q1 2023 and Q1 2025.
Most remaining BUSD balances are parked in exchange wallets, waiting for conversion into FDUSD or USDT.
Stablecoin liquidity rotation data shows that institutions now favor FDUSD and USDC for arbitrage and treasury functions.
The BUSD DeFi footprint shrank dramatically, with Curve, Venus, and Balancer removing support between 2023 and 2024.
Paxos reported that less than 10% of BUSD redemptions in 2024 were from new wallet addresses, indicating minimal new retail inflow.
Retail users now overwhelmingly opt for PayPal USD, USDC, or native exchange-based tokens due to better incentives and regulatory confidence.

Recent Developments

March 2023: Paxos officially stopped minting new BUSD tokens per NYDFS order.
Q2 2023: Binance began aggressively promoting FDUSD as the BUSD replacement.
October 2023: Automatic conversions to BUSD will be discontinued across all Binance services.
Q1 2024: Binance removed nearly all BUSD-denominated futures contracts.
August 2024: Paxos published its final BUSD attestation report.
January 2025: BUSD dropped out of the top 10 stablecoins by market cap.
February 2025: Major exchanges, including OKX and KuCoin, announced the deprecation of BUSD trading pairs.
March 2025: Binance issued final guidance urging users to convert the remaining BUSD to FDUSD or USDT.
Ongoing: Paxos continues honoring $1 redemptions for legacy BUSD holders, with sunset expected by late 2025.

Conclusion

Binance USD was once a model stablecoin: regulated, transparent, and widely adopted. But the landscape changed. Regulatory scrutiny, evolving preferences, and Binance’s pivot away from BUSD have collectively reshaped its role in the market.

As of 2025, BUSD stands not as a failed project but as a case study of how even well-regulated stablecoins can falter under external pressure. While it still honors redemptions and maintains a $1 peg, its relevance has nearly evaporated in daily crypto activity. The transition to FDUSD and USDT reflects a broader shift in the industry, one that values agility and adaptability above legacy status.

For users and institutions, BUSD’s sunset offers a critical lesson: in crypto, even stability needs to evolve.