The trading pairs involving First Digital USD (FDUSD) have seen a surge in trading volume on Binance, reaching its highest share ever in spot trading volume on the exchange.
On February 12, FDUSD pairs accounted for 38% of Binance’s total spot trading volume, marking a substantial 42.6% increase compared to the previous month, according to data from The Block Pro.
The popularity of FDUSD on Binance can be attributed to several factors.
Firstly, the BTC/FDUSD trading pair is free to trade, which naturally draws attention and contributes to its growing usage.
Additionally, most FDUSD pairs on Binance do not have any maker fees, further incentivizing traders to engage with these trading pairs.
This combination of cost-effectiveness and accessibility has likely played a significant role in driving up the trading volume of FDUSD pairs on the exchange.
Moreover, the recent discontinuation of support for Binance USD (BUSD) on the platform may have motivated users to convert their holdings into the newer stablecoin, FDUSD.
Binance’s Relationship With FDUSD
FDUSD (First Digital USD) is a 1:1 USD-backed stablecoin launched in June 2023 by FD121, a subsidiary of First Digital, a Hong Kong-based custodian and trust company.
Binance subsequently listed FDUSD a month later, offering traders the advantage of zero trading fees for this particular stablecoin.
The move came as Binance decided to cease support for BUSD, its previously endorsed stablecoin, following Paxos’s end of its relationship with Binance due to regulatory pressure from the SEC.
FDUSD, launched by a Hong Kong company, has replaced BUSD on Binance. On February 12, trading pairs containing FDUSD accounted for 38% of total Binance spot trading volume, an increase of 42.6% compared to the previous month. Binance’s previously launched BUSD was banned by the…
— Wu Blockchain (@WuBlockchain) February 15, 2024
The world’s largest exchange encouraged its users to convert their BUSD balances to FDUSD, offering a 1:1 conversion ratio without any cost, marking a significant pivot towards backing FDUSD as a preferred stablecoin on its platform.
Since its listing, FDUSD has seen a notable increase in market capitalization.
US to Pass Stablecoin Legislation This Year
Last month, Circle CEO Jeremy Allaire expressed confidence in the United States finally passing long-awaited stablecoin legislation this year.
In an interview at the World Economic Forum’s annual meeting in Davos, Switzerland, Allaire said there is growing momentum in the country’s efforts to regulate digital currencies tied to the US dollar.
“I think there’s momentum. I think there’s a very good chance of seeing this pass into law this year,” Allaire remarked during the interview.
Allaire, who leads the company responsible for the popular stablecoin USD Coin ( USDC), highlighted the global trend of central banks and governments embracing digital currencies tied to their national currencies.
He pointed out that other countries had already taken steps to regulate such digital dollar currencies while the United States lagged behind. Allaire further explained:
“Digital dollars are happening around the world, other governments are regulating dollar-digital currencies before the United States. So I think there is a very strong desire to act and assert U.S. leadership and get the right consumer protections involved.”
