Binance continues to map higher stable sediments to record ERC-20 reserve levels

Binance's record-breaking ERC-20 stablecoin reserves hit new high

With its position as a major trading platform, Binance continues to maintain a leading position in stablecoin reserves. Most traders choose Binance as their primary trading venue, which drives growth in their stablecoin reserves.

Despite slowing growth in the first quarter of 2024, Binance's stablecoin reserves continued to grow and reached a record ERC-20 token reserve level. The continued inflow of stablecoins, especially at the end of 2024, has left stablecoins still sufficient even as market growth slows down, providing abundant asset reserves for over-the-counter trading. The growth of stablecoins also provides a way to reduce risks, and the supply of stablecoins is still growing even as the cryptocurrency market falls 30% from its peak.

Most stablecoins flow into the derivatives trading market, with a peak supply of more than 47 billion tokens. In contrast, the demand for stablecoins in the spot market is relatively low, as most trading activities rely on leveraged trading of BTC and ETH.

Stablecoin inflows drive growth in derivatives trading

The total supply of stablecoins on the exchange reached 45 billion tokens of various types, of which USDT and USDC are still the most important two. Binance holds more than 33 billion stablecoins, including its centrally issued FDUSD. Binance holds USD338 million for USDC, USD29.4 billion for USD2, and USD1.5 billion for FDUSD. The exchange is also one of the most active markets for USDT trading, with 24-hour trading volume reaching US$1.67 billion.

Binance's business reflects changes in regional regulation, such as increasing the use of regulated USDC tokens in the euro zone while halting USDT products. However, this change has not affected the overall inflow of stablecoins. Binance's daily trading volume is still over $17 billion, thanks to trading volumes in its native token BNB and multiple stablecoin markets.

Binance handled 5.34% of all USDC transactions, with BTC trading pairs being the most active. Recent inflows of stablecoins have mainly enhanced liquidity in the derivatives BTC market and spot markets.

The inflow of stablecoins on centralized exchanges also reflects the overall trend of the total supply of stablecoins to 229 billion tokens (the specific number depends on the calculation method). Most stablecoins are pegged to the US dollar, and other currencies have stablecoins of about $2 billion.

Stablecoins are one of Binance's main reserve assets. According to its transparency report, the exchange has a total assets of more than $133 billion. USDT reserves cover 104% of user claims, and USDC market coverage is higher, reaching 161%. The excess reserve comes from handling fees, clearing fees and other user-based payments.

Binance remains the main centralized exchange, accounting for the largest share of derivative open contracts.

BNB Smart Chain holds 7 billion stablecoins

The decentralized Binance ecosystem (BNB Smart Chain) holds more than 7 billion stablecoins that are bridging or natively issued through cross-chain bridges. BNB Smart Chain is the fourth largest blockchain network, and its stablecoin supply continues to grow.

More than 53% of stablecoins are still on Ethereum. The ERC-20 stablecoin is also the most common stablecoin type in Binance reserves. Tron accounts for more than 28% of the total supply, while USDC holdings on Solana are $10 billion, accounting for 5.4% of the total supply.

The supply of three major stablecoins, USDT, USDC and FDUSD, on the BNB smart chain, is about $5.9 billion, an increase of more than $2.2 billion in the past 12 months. The rest of the stablecoins come from other smaller cross-chain bridged stablecoins.

BNB smart chain is mainly used for convenient transfer and payment of stablecoins. The total amount of USDT transfers exceeds US$4.5 billion, USDC transfers are approximately US$500 million, and FDUSD transfers are approximately US$60 million per day. Most users on the BNB smart chain prefer USDT, the main source of liquidity for payments and decentralized transactions.

At present, the growth rate of the BNB smart chain decentralized ecosystem lags behind the success of the Binance derivatives market.

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