Binance USD, a U.S. dollar-backed stablecoin, has surpassed $100 million in market capitalization, chipping away at a market still dominated by Tether's TUSD. 

Also known as BUSD, the token is traded almost exclusively on the Binance exchange and its market cap - which roughly corresponds to the total value of dollars deposited with its issuer, Paxos - is currently at $115 million. Binance USD runs on top of the Ethereum blockchain.

Stablecoins are blockchain-based and tied to traditional assets or currencies, such as U.S. dollars. They are used for trading on cryptocurrency exchanges, generally where crypto/fiat pairs are unavailable due to regulatory or banking reasons. BUSD is backed by U.S. dollars in an FDIC-insured U.S. bank and audited on a monthly basis. 

Binance is one such exchange where one cannot trade cryptocurrencies using dollars. Therefore, stablecoins like BUSD are important to its business. It lists several other stablecoins, including Tether (USDT), which has much higher volume on Binance than BUSD. In fact, the majority of trading in BUSD, almost 40 percent market, is with Tether while the BUSD/BTC trading pair is second at 35 percent, according to data from CoinGecko. 

Almost every asset listed on Binance is paired with Tether, and its volumes are substantial. For example, the USDT/BTC pair had $611 million in volume the past 24 hours. The BUSD/BTC pair only had $16 million in volume during that time.

Yet, BUSD, with its promising early gains, has a shot at being the dollar-backed crypto asset to beat. New York-based Paxos told CoinDesk that BUSD’s market capitalization has grown by more than 400 percent in the past month to $115 million from $22 million.

“The spectacular growth of BUSD shows that the market is hungry for an alternative. We're excited about this milestone and proud to partner with Binance to deliver an optimal solution for our global users,” Paxos co-founder Rich Teo said in a statement Wednesday. 

Stablecoin titan Tether, with a market cap of $4.6 billion, is facing a battle with New York's Attorney General in a court case delving into its financial practices. Tether has never issued a full audit of its reserves, although it does have a regularly updated transparency page. 

In addition to BUSD, other bank-audited stablecoins include the Circle and Coinbase-backed USDC, which has a $406 million market cap. Paxos also has its own branded stablecoin, Paxos Standard, which has a $206 million market capitalization.