• FDUSD, a USD-backed stablecoin issued by First Digital Labs, saw an impressive start after getting listed on the Binance exchange.
• The zero-fee trading program might have contributed to the soaring volume of the coin.
• Binance’s aggressive backing of newer stablecoins is likely due to the phasing-out stage of Binance USD [BUSD], which once vied for the stablecoin crown with Tether.
Introduction
First Digital USD [FDUSD] made an impressive start after getting listed on the Binance exchange earlier this week. According to digital assets data provider Kaiko, FDUSD traded at a premium to world’s largest stablecoin, Tether [USDT], briefly on 28 July, reflecting greater demand for the newly-listed asset.
Zero Fee Trading Program
FDUSD is a 1:1 USD-backed stablecoin issued by Hong Kong-based First Digital Labs. The coin was listed as part of Binance’s now popular zero fee trading program with all spot trading pairs, including FDUSD/USDT becoming exempt from maker and taker fees. The exchange fee waive-offs might have contributed to the soaring volume of the coin as highlighted earlier. It should be noted that Binance employed the same promotional strategy to promote another stablecoin, TrueUSD [TUSD].
Success of Other Stablecoins
TUSD’s market cap has more than tripled on a year-to-date (YTD) basis, as per Glassnode. This success was imperative in order to correct the imbalance in the current state of stablecoin market where USDT accounted for a massive 66% of the overall market share due its decline in usage amongst other competitors such as USDC and PAXOS Standard Token (PAX).
Will FDUSD Replicate TUSD’s Feat?
With Binance’s backing, it remains to be seen if FDUSD will replicate TUSD’s feat or not? However it is clear that Binance wants to distance itself from its own native token –Binance USD– which had been losing traction ever since its issuer Paxos was instructed by New York regulator to halt minting new tokens in late June 2020.
Conclusion
The success of TUSD and FDUSD has been pivotal in trying to achieve parity across different types of Stablecoins currently available in markets worldwide and thus create a balance between them and their respective issuers. As far as FDUDS’s performance goes only time will tell if it can match up or even surpass other leading coins such as Tether and Trueusd when it comes down marketing activities and user adoption rates amongst investors worldwide.