• The US Securities and Exchange Commission (SEC) recently issued a Wells notice to the BUSD issuer Paxos.
• Following the news, both USDC and BUSD have experienced diverse movements.
• On Feb. 24, Circle CEO Jeremy Allaire said that banking regulators could be better suited for regulating stablecoins than the SEC.
SEC Pressure on Stablecoins
The US Securities and Exchange Commission (SEC) issued a Wells notice to the BUSD issuer Paxos earlier this month. This has led to some interesting movement in two of the largest stablecoins, USDC and BUSD.
USDC Experiences Decline
Data from Glassnode shows that the number of USDC sending addresses has dropped to 1,384.976, almost a two-month low. The total market cap of USDC fell to roughly $40.8 billion on Valentine’s Day – one day after CEO Changpeng Zhao’s tweet about the Wells notice – and is currently sitting at around $42.7 billion according to CoinMarketCap data.
BUSD Sees Mixed Movements
On one hand, Glassnode data reveals that the number of BUSD transfers has plunged to five-month lows at approximately 85.720, while its mean transaction volume (MTV) surged to an eight-month high of $886 million on Feb 27th 2023. On the other hand, BUSD’s market cap has fallen by nearly $6 billion since receiving its SEC Wells notice, reaching around $10.8 billion as of writing this article.
Circle CEO Speaks Out Against SEC Regulation
On Feb 24th 2023 , Circle CEO Jeremy Allaire says that banking regulators could be better suited for regulating stablecoins than the SEC which he believes is not right regulator for these assets class .
Overall , it appears that following the pressure from SEC , both USDC and BUSD have experienced mixed movements . It will be interesting to see how these two stablecoins respond in light of their recent regulatory challenges .