The stablecoin market cap on Binance’s BNB Chain has reportedly exploded by 49.6%, Quarter over Quarter (QoQ) in Q2, hovering at an impressive $10.5 billion. BNB Chain is home to prominent stablecoins, and with surging stablecoin adoption, the chain has witnessed unprecedented growth in stablecoin market cap. For crypto newbies, market cap is the total number of a cryptocurrency available in circulation multiplied by its price.
Which stablecoins live on BNB Chain?
BNB Chain is a blockchain ecosystem developed by Binance, designed for smart contracts, decentralized applications (dApps), and digital asset transfers. Major stablecoins on the BNB Chain are Tether (USDT), USD Coin (USDC), Binance USD (BUSD), DAI, and First Digital USD (FDUSD).
Why is there a stablecoin market cap increase?
Increased stablecoin market cap on BNB Chain signals,
- Increased adoption of DeFi and dApps, as BNB Chain is more exposed to DeFi platforms and lending protocols
- Emerging market adoption, meaning, users rely on cheap and faster stablecoin transfers where unstable local currencies exist.
- Higher yields on stablecoin deposits when compared to the Ethereum mainnet.
- Binance’s fiat on-ramps (fiat conversion) and bridging (moving assets across blockchains) features allow institutional and retail users to move stablecoins into the chain.
What does this increase mean?
Rising stablecoin market cap indicates
- Higher liquidity for investors and traders.
- More money available for DeFi protocols, yield farming, lending protocols, and derivatives.
- Instant and secure transaction settlement
- Strong confidence in stablecoin usage
Besides the strong stablecoin market cap, BNB Chain experienced a total market cap of $92.6 billion, covering DeFi, DEX, and other on-chain activities.
BNB Chain’s Q2 performance marks another stage of growth in the future. The significant 49.6% stablecoin market cap growth shows one simple truth — capital is flowing back to the BNB chain with stablecoins leading the charge.
With stability at the heart, stablecoins are luring more investors, including giant institutions and banks. Several governments have also dipped their toes in stablecoin adoption. Recently, China has signaled its interest in yuan-backed stablecoins, Ripple is set to launch its RLUSD in Japan, and crypto wallet MetaMask has launched its native mUSD stablecoin.
