Binance BNB Chain’s stablecoin reserves expanded sharply this week, adding more than $2 billion in value following the debut of USD1, a politically branded dollar token issued by World Liberty Financial.
DefiLlama data shows that the chain’s stablecoin market capitalization surged 30% over the past seven days to reach $9.26 billion. That gain narrowed the gap between BSC and Solana to just $3.8 billion, marking the closest distance between the networks since memecoins propelled Solana ahead.
USD1’s introduction on BSC coincided with its positioning as an institutional-grade stablecoin backed by U.S. Treasury bills and safeguarded by BitGo. Its launch comes at a time when stablecoins broadly have been regaining momentum. The sector’s total market capitalization rose 2.5% this week to $240.47 billion, indicating renewed on-chain activity despite ongoing regulatory headwinds.
The sharp expansion in BSC’s stablecoin supply may alter the competitive landscape among layer-1 blockchains. While Ethereum continues to dominate with more than $124 billion in stablecoin assets, amounting to 52% market share, and Tron retains a commanding 29% share at $71 billion, BSC’s increase to 3.8% brings it within reach of Solana’s 5% share.
There is now a chance of BSC overtaking Solana in stablecoin volume amid the Solana memecoin collapse, which could redirect liquidity flows and developer attention across decentralized finance platforms.
USD1’s growth on BSC reflects both strategic and political dimensions. The token, promoted as fully audited and compliant, carries the association of former U.S. President Donald Trump through its issuer, World Liberty Financial.
This link introduces new regulatory and reputational considerations not typically associated with other dollar-backed assets. BitGo’s involvement as custodian, combined with the stablecoin’s fiat and T-bill backing, positions USD1 as a direct challenger to entrenched competitors such as USDT and USDC.
Momentum around USD1 accelerated further as Eric Trump announced the stablecoin will be used to settle MGX’s $2 billion investment in Binance. He described the move as a major step toward creating a transparent, regulated, and borderless digital dollar, adding new weight to USD1’s institutional ambitions and potential role in large-scale capital flows.
USD1 is currently placed 7th by market cap among all stablecoins, beating out PayPal PYUSD, FDUSD, and Ethena USDTB.
While the on-chain expansion signals interest, liquidity remains thin. Major exchanges have not listed USD1; full audit details, including smart contract assessments and reserve attestations, have not been disclosed publicly. Incentive programs driving early adoption may also be temporary, raising questions about the sustainability of the current momentum.
World Liberty Financial’s Zach Witkoff framed USD1 as an enabler for “sovereign investors and major institutions” to conduct secure cross-border settlements. Others voiced caution. Kevin Lehtiniitty of Borderless.xyz remarked that while launching a stablecoin is simple, cultivating meaningful adoption remains complex and uncertain.
Still, the debut has already reshaped stablecoin trends on BSC. Should USD1’s liquidity deepen and audit transparency improve, BSC’s proximity to Solana could herald a reshuffle of the layer-1 hierarchy. For now, the influx of capital is the most significant weekly jump in BSC’s stablecoin market since early 2023.
