The asset holders can swap their tokens between Binance Smart Chain (BSC) and Ethereum. Paxos issues BUSD (ERC-20) on the Ethereum blockchain while Binance creates BUSD (BEP-20) by holding BUSD in an Ethereum blockchain address and minting peg BUSD tokens. The withdrawal of 1,000 BUSD will lead to a burning of the tokens accordingly.īinance says: “BUSD provides a monthly audited report of reserves in compliance with stringent regulatory standards to ensure the security and safety of user assets.”Īccording to Binance and CoinMarketCap, BUSD can be traded on over 30 exchanges. “BUSD also offers flexibility in allowing crypto users to quickly turn their holdings into a stable asset without moving off the blockchain,” added Binance. For example, for every 1,000 BUSD created, Paxos will need to hold $1,000 in reserve for the cryptocurrency. Unlike fully decentralised cryptocurrencies, BUSD is regulated by the New York State Department of Financial Services (NYDFS), according to Binance.Īs part of the compliance and to support the value of the BUSD, Paxos holds an equal amount of US dollars to the total supply of the token. ![]() Using a stablecoin such as BUSD can help significantly to hedge against periods of market volatility.” BUSD is designed to minimise the risk of volatility experienced by most cryptocurrencies.īinance says: “Due to the nature of cryptocurrency, crypto holders may experience volatile changes in their portfolio value. The key feature of the coin is that one BUSD is intended to be equivalent to $1.īUSD was founded by the blockchain infrastructure platform Paxos and cryptocurrency exchange Binance in 2019. The value of the US dollar acts as a benchmark for the BUSD. What is binance USD?īinance USD is a stablecoin that is pegged to the US dollar (USD), a fiat currency. The data may be called into question after Mazars conducting a proof-of-reserves assessment of Binance earlier this month, which potentially finds its bitcoin reserves overcollateralized. The other two major stablecoins are tether ( USDT) and USD coin ( USDC). At the time of writing, on 16 December 2022, the token's market capitalisation stands at almost $19bn, and it is the third-largest stablecoin, according to CoinMarketCap. However, BUSD’s market cap has been increasing rapidly since January 2021, when it stood at just under $1bn. The price of the BUSB stablecoin saw increased volatility in the second and third quarters of 2022. The increased volatility could be partly attributed to instability and illiquidity in the current bear market, with BUSD trading between $0.9989 and $1.00 in a recent 24-hour window, according to data sourced from CoinGecko. So what does this mean for the future of BUSD? Binance USD (BUSD) Live Price Chart ![]() In November Binance, announced “BUSD Auto-Conversion”. As a result, the platform is able to convert user balances and new deposits of USD coin (USDC), pax dollar (USDP) and true USD (TUSD) into its own stablecoin, binance USD (BUSD). The exchange says that this will help improve liquidity and capital efficiency, as well as providing benefits to users.īoth Binance and WazirX have announced plans to prioritise BUSD over other stablecoins. Mazars said it had paused all proof-of-reserves work with cryptocurrency clients, including Binance, because of concerns about “the way these reports are understood by the public.” A spokesperson for the company said Binance had managed the withdrawals “without breaking stride”. The auditor of the cryptocurrency exchange Binance, Mazars has withdrawn from “proof of reserves” work with crypto companies in the wake of the collapse of the FTX exchange.īinance, the world’s largest crypto exchange, saw $6bn of withdrawals in the three days from 12 to 14 December. BUSD wobbled after the Terra Luna fall-out, but has remained stable since – Photo: Shutterstock
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