In June 2023, Hong Kong-based financial technology company First Digital officially launched its own stablecoin, the First Digital USD (FDUSD).
Shortly after its release, FDUSD received special attention from the leading cryptocurrency exchange Binance, which announced its listing along with several exciting incentive programs. Specifically, starting from September 15th, the exchange will cease using BUSD in investment products such as “Auto Invest” and will automatically replace it with FDUSD.
Furthermore, the exchange offers an annual percentage yield of 6% for FDUSD deposits through the “Earn” product during a temporary promotion lasting two weeks until September 15th.
Thanks to the endorsement from Binance, the market capitalization of FDUSD has been steadily increasing, gradually taking market share away from BUSD. According to data from CoinGecko, FDUSD’s market capitalization has increased by 51% in the past 30 days, reaching $394 million and placing it 11th among all stablecoins.
However, despite the increasing supply of FDUSD, its adoption within the cryptocurrency and DeFi spaces still has limitations. Data from Nansen shows that the majority of FDUSD holders are concentrated on Binance (accounting for 90%), with minimal presence in the DeFi space.
Relying entirely on a centralized exchange like this has diminished the credibility of FDUSD. The community finds it challenging to trust and use a stablecoin that can only be used within a centralized exchange. When attempting to withdraw to use on decentralized exchanges (DEXs) or within DeFi and lending platforms, it is nearly “useless.”
Therefore, FDUSD needs further improvement to align with the constantly evolving landscape of the global cryptocurrency market.