Stablecoin issuer Paxos faces potential litigation from the U.S. Securities and Exchange Commission (SEC) over BUSD-related issues. The SEC has issued a "Wells notice" to Paxos, indicating possible enforcement actions. The SEC alleges that BUSD, issued and listed by Paxos, is an unregistered security and plans to sue Paxos for violating investor protection laws, with potential compulsory actions to follow.
With increasing redemptions and burns of BUSD over the past month, could this signal an explosive growth period for low-market-cap stablecoins? How should investors choose among them? Below is a curated overview of key stablecoins:
Top Contenders Beyond USDT, USDC, and BUSD
DAI:
- Market cap: $5 billion (Ranked #4)
- Mechanism: Collateralized via Maker Vaults.
- Related token: MKR ($830M market cap, Rank #65).
TUSD:
- Market cap: $1.1 billion (Ranked #5)
- Recent activity: Binance minted $130M in TUSD.
- Related token: TRU ($91M market cap, +120% recent gain).
FRAX:
- Market cap: $1 billion (Ranked #6)
- Mechanism: Partially collateralized with USDC and FXS burns.
- Related token: FXS ($880M market cap, Rank #60).
USDD:
- Market cap: $700M (Ranked #8)
- Issuance: Backed by TRX staking via TRON DAO Reserve.
- Related token: TRX ($6.3B market cap, Rank #15).
Emerging Stablecoins to Watch
| Stablecoin | Market Cap | Key Feature | Related Token |
|---|---|---|---|
| LUSD | $230M | ETH-collateralized via Liquity | LQTY ($190M) |
| MIM | $130M | Yield-bearing collateral | SPELL ($90M) |
| SUSD | $127M | SNX-backed | SNX ($720M) |
| DOLA | $79M | Overcollateralized | INV ($13M) |
| MAI | $49.9M | Multi-chain collateral support | QI ($9.2M) |
The Opportunity on BNB Chain
With BUSD's phased exit, BNB Chain urgently needs new stablecoin contenders to fill the void. This presents a prime opportunity for innovative projects to capture market share.
👉 Discover how emerging stablecoins are reshaping DeFi
FAQs
Q: Why is SEC targeting BUSD?
A: The SEC classifies BUSD as an unregistered security, citing non-compliance with investor protection laws.
Q: Which stablecoin has the highest growth potential?
A: FRAX and TUSD show strong traction due to their hybrid models and exchange support.
Q: How does DAI maintain its peg?
A: Through decentralized collateralization and MakerDAO’s governance mechanisms.
Q: Are algorithmic stablecoins safe?
A: They carry higher risks (e.g., TerraUSD collapse) but can offer scalability if properly designed.
Q: What’s the future of small-cap stablecoins?
A: Niche use cases (e.g., cross-chain interoperability) may drive selective adoption.
👉 Explore the latest trends in stablecoin innovation
Note: This is not financial advice. Conduct independent research before investing.