Binance USD (BUSD) is a stablecoin backed 1:1 by the US dollar and issued by Binance in partnership with Paxos. It is regulated by the New York State Department of Financial Services (NYDFS) and aims to combine the stability of the dollar with the efficiency of blockchain technology. BUSD was launched on September 5, 2019, as an ERC-20 token but also supports BEP-2.
You can purchase BUSD from various exchanges listed on market pairs tab on CoinMarketCap, or directly redeem it from Paxos. BUSD is fully backed by reserves held in fiat cash at insured U.S. banks and/or U.S. Treasury bills. Paxos Trust Company, LLC issues BUSD on the Ethereum blockchain. Additionally, Binance offers a wrapped version of BUSD (Binance-Peg) on BNB Chain, which is not regulated by NYDFS.
BUSD has various use cases, including:
Transferring digital dollars quickly and affordably on the blockchain.
Trading BUSD on exchanges and decentralized exchanges (DEX).
Depositing BUSD to earn interest.
Paying for goods and services with BUSD.
Using BUSD as collateral for loans or in futures trading.
Storing BUSD on exchanges or in wallets.
The BUSD ecosystem has experienced significant growth, with its market capitalization increasing from around US$1 billion to over US$14.6 billion in 2021. BUSD is widely supported by wallets, platforms, DEXes, and CEXes, contributing to its adoption. It is also integrated into various DeFi protocols, allowing users to earn yield on their BUSD holdings.
Paxos, the issuer of BUSD, has disclosed that 96% of the assets backing BUSD are held in cash and cash equivalents, while 4% are invested in U.S. Treasury bills. This transparency aims to provide users with confidence in BUSD's stability and reliability.
Furthermore, Binance has demonstrated the use of BUSD for charitable purposes by donating $2.5 million in BUSD to USA for UNHCR, a UN refugee agency. This showcases how cryptocurrency, particularly stablecoins like BUSD, can be utilized for humanitarian aid and fundraising efforts.
0 Comments