BUSD supply fell 16.6% in six days as Paxos minting halt approached

CoinMarketCap’s February 19, 2023 historical snapshot recorded 13,238,824,106 Binance USD tokens in circulation, down 2,634,455,754 BUSD from its February 13 snapshot. That is a calculated decline of approximately 16.6% in six calendar days as issuer Paxos Trust prepared to stop creating new units of the Binance-branded stablecoin.

The contraction mattered because BUSD was still the eighth-largest crypto asset in CoinMarketCap’s February 19 table, with a reported market capitalization of $13.24 billion. Stablecoins served as settlement assets, collateral and trading-quote currencies across centralized exchanges and decentralized applications. A multibillion-token reduction therefore represented more than an ordinary price move: it showed users converting or redeeming a major piece of the market’s dollar-denominated infrastructure.

The six-day measurement

CoinMarketCap listed BUSD circulating supply at 15,873,279,860 tokens in its February 13 snapshot and 13,238,824,106 in its February 19 snapshot. Subtracting the latter from the former produces the 2.63 billion-token decline; dividing that difference by the February 13 figure produces 16.6% after rounding to one decimal place.

The same February 19 snapshot priced BUSD at $1.0002 and reported $7.22 billion of volume over the preceding 24 hours. Those figures indicate that the aggregator still measured BUSD close to its intended one-dollar price despite the supply contraction. They do not establish that every venue maintained an identical price or that every reported trade was independently verified.

The calculation also should not be read as a direct ledger-level count of customer redemptions. CoinMarketCap’s circulating-supply methodology is an aggregated market-data measure, and its dated snapshots do not disclose an exact intraday observation time on the page. A contemporaneous Bitcoin.com report cited approximately 13.24 billion BUSD on February 19 but noted that Glassnode showed roughly 13.43 billion, demonstrating that providers could disagree because of timing and methodology.

Paxos had announced an orderly wind-down

On February 13, Paxos announced that it would end its BUSD relationship with Binance and cease issuing new tokens effective February 21. Paxos said it was acting at the direction of, and in coordination with, the New York State Department of Financial Services.

That chronology is important. On February 19, the announced issuance cutoff had not yet taken effect. Existing BUSD remained outstanding, and Paxos said it would continue managing the reserves and allow eligible customers to redeem BUSD for dollars or convert it to Pax Dollar. Paxos also said BUSD would remain redeemable through at least February 2024 and that the tokens it issued were backed one-for-one by segregated dollar-denominated reserves. Those were contemporaneous issuer representations, not an independent Coinburn audit.

The market response nevertheless demonstrated the asymmetric effect of the planned policy. Once new issuance stopped, redemptions and token burns could reduce Paxos-issued supply while no new minting could replace it. Even before the February 21 cutoff, holders were already moving away from the product at material scale.

What was known—and what remained uncertain

The February 19 evidence established a rapid contraction, not a loss of the dollar peg or a failure to honor redemptions. It also did not show which holders redeemed, why individual users acted, or how much activity migrated into USDT, USDC, fiat balances or other assets. Attributing every removed token solely to regulatory concern would therefore exceed the record.

In a later clarification dated April 11, 2023, New York’s financial regulator said it had ordered Paxos to stop minting because of unresolved issues concerning Paxos’s oversight of its Binance relationship. The regulator distinguished Paxos-issued BUSD on Ethereum from Binance-Peg BUSD on other blockchains and said it was monitoring Paxos’s ability to process redemptions. That later notice clarifies the supervisory background but does not change what market participants could verify on February 19.