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Binance's First Digital USD (FDUSD) Surpasses USDC in Bitcoin Trading

The popularity of the FDUSD stablecoin for BTC trading is on the rise

Binance's First Digital USD (FDUSD) has captured the market's attention by achieving a remarkable trading volume of $122 billion in January alone. This surge not only signifies a 51.1% increase from previous figures but also positions FDUSD as the second-most favored Bitcoin trading pair, trailing only behind Tether's USDT

The ascent of FDUSD marks a significant milestone, as it dethrones Circle's USD Coin (USDC) in Bitcoin trading volume, a testament to the crypto community's growing preference for Binance's stablecoin offering. The pivot towards FDUSD is largely attributed to Binance's innovative zero-trading fee program, which has catalyzed the stablecoin's adoption and utility in the digital currency ecosystem.

FDUSD's trading volume and market cap achievements

FDUSD propelled past the Circle-issued USD Coin (USDC), making it a preferred choice for traders seeking stability and reliability in their digital transactions. As of January, FDUSD's market cap soared to an all-time high of $2.44 billion, capturing a 15.6% share of the stablecoin market. This growth trajectory underscores FDUSD's rising prominence and acceptance within the cryptocurrency trading community, further evidenced by its dominant role in Bitcoin trades on Binance. 

The BTC/FDUSD trading pair emerged as the most voluminous, amassing a monthly trading volume of $80.8 billion, a clear indicator of the market's confidence in FDUSD's value and stability.

Comparison with USDT and market dynamics

Despite FDUSD's impressive ascent in the cryptocurrency market, Tether's USDT maintains its stronghold as the sector's dominant stablecoin. With a commanding market share that hovers around three-quarters among the top 10 stablecoins, USDT's influence remains unmatched. In January, USDT's trading volume on centralized exchanges was a colossal $241 billion. 

USDT's market capitalization experienced a modest increase of 1.23% in February, reaching a new zenith of $97.3 billion. This growth reflects USDT's unwavering position as the most utilized stablecoin, despite FDUSD's recent gains.

The competitive landscape between FDUSD and USDT illuminates the dynamic nature of the stablecoin market. While FDUSD's rise is noteworthy, USDT's enduring dominance suggests a market that values the security and liquidity associated with Tether's offering. Analysts from JPMorgan have raised concerns about USDT's market dominance potentially stifling competition within the industry. 

However, Tether CEO Paolo Ardoino has robustly defended the stablecoin's position, emphasizing its critical role in the broader cryptocurrency ecosystem.