Amidst a significant decline in the stablecoin market, with a loss exceeding $3 billion in just 40 days, new stablecoin initiatives are coming to the forefront. One such move is from Binance, the world’s leading exchange by trade volume, which recently unveiled three new trading pairs tied to a stablecoin called first digital USD (FDUSD), as mentioned in a recent blog post. However, the launch of FDUSD faced a temporary setback as the exchange encountered “technical issues” with liquidity providers.
The stablecoin market, currently valued at over $126 billion, has been witnessing consistent contraction throughout 2023. In response to this trend, Aave, a decentralized lending platform, introduced its stablecoin called GHO, which saw significant growth from a market capitalization of $3.25 million on July 19, 2023, to $7.68 million.
On July 26, Binance, the largest cryptocurrency exchange in terms of trade volume, announced the addition of a new stablecoin, FDUSD, through a blog post. The post stated that FDUSD would be paired with BNB, BUSD, and USDT, and users were given the option to make FDUSD deposits.
However, a subsequent blog post from Binance revealed the postponement of FDUSD trading pairs due to “technical issues” faced by liquidity providers. The exchange assured users that trading would resume at 14:00 (UTC), and any orders placed before the announcement would be canceled.
FDUSD is developed by First Digital Labs, and according to their website, it maintains a 1:1 backing with U.S. dollars. The company, operated by FD121 Limited, claims its Hong Kong-based headquarters serve as a custodian and registered trust company, as stated in a press release issued on June 1, 2023.
The creators of FDUSD assert that it is backed by “high-quality reserves—cash and cash equivalents.” Data from Etherscan shows that the total supply of FDUSD stands at 1,114,126, with the majority held in a wallet labeled “Binance 14.” As of 9:40 a.m. Eastern Time (ET) on Wednesday, FDUSD has experienced a total of 23 transfers.
The website of First Digital Labs features an attestation report from Prescient Assurance LLC, dated July 20, 2023. The report confirms that the trust has the capacity to hold “U.S. dollars, U.S. Treasury backed bills, and overnight reverse repurchase agreements.”
As the community awaits the resolution of the technical issues, the introduction of three new trading pairs with FDUSD by Binance has garnered attention and interest. What are your thoughts and opinions on this development? Feel free to share them in the comments section below.
Frequently Asked Questions (FAQs) about stablecoin market decline
1. What did Binance announce recently?
Binance recently announced the addition of a new stablecoin called FDUSD through a blog post.
2. How does FDUSD differ from other stablecoins?
FDUSD is a stablecoin that is backed 1:1 with U.S. dollars, making it different from other stablecoins that may have different backing mechanisms.
3. What trading pairs were introduced for FDUSD?
Binance introduced three new trading pairs for FDUSD, which are FDUSD/BNB, FDUSD/BUSD, and FDUSD/USDT.
4. What caused the temporary halt in FDUSD listings?
The FDUSD listings were temporarily halted due to “technical issues” faced by liquidity providers.
5. When will FDUSD trading resume?
Trading of FDUSD is scheduled to resume at 14:00 (UTC) after the technical issues have been addressed.
6. Who developed FDUSD?
FDUSD was developed by First Digital Labs, an operation managed by FD121 Limited, with their headquarters located in Hong Kong.
7. What does the website of First Digital Labs say about FDUSD’s backing?
The website claims that FDUSD is supported by “high-quality reserves,” including cash and cash equivalents.
8. What is the total supply of FDUSD?
The maximum total supply of FDUSD is 1,114,126, with a significant portion held in a wallet labeled “Binance 14.”
9. How many transfers had FDUSD experienced at a specific time?
As of 9:40 a.m. Eastern Time (ET) on Wednesday, FDUSD had experienced a total of 23 transfers.
10. Is there an attestation report for FDUSD’s backing?
Yes, the website of First Digital Labs features an attestation report from Prescient Assurance LLC, confirming the trust’s capacity to hold U.S. dollars, U.S. Treasury backed bills, and overnight reverse repurchase agreements.
More about stablecoin market decline
Aave Official Website: The official website of Aave, the decentralized lending platform that introduced the GHO stablecoin.
Prescient Assurance LLC: The website of Prescient Assurance LLC, the company mentioned in the text, which provided the attestation report for FDUSD’s backing.