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About BUSD
Key Points
- BUSD is a 1:1 USD-backed stablecoin issued by Binance and Paxos, regulated by NYDFS.
- Launched on September 5, 2019, BUSD aims to combine dollar stability with blockchain technology.
- BUSD is 100% backed by reserves held in fiat cash and U.S. Treasury bills.
- BUSD can be bought from exchanges and redeemed from Paxos without extra fees.
- BUSD use cases include transactions, payments, settlement, DeFi, and more.
- The BUSD ecosystem grew from $1B to $14.6B in market capitalization in 2021.
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About BUSD: A Stablecoin for the Modern Era
What is BUSD: A Comprehensive Overview
Binance USD (BUSD) is a 1:1 USD-backed stablecoin, issued by Binance in partnership with Paxos, and approved and regulated by the New York State Department of Financial Services (NYDFS). The BUSD Monthly Audit Report is available for viewing on the official website. Launched on September 5, 2019, BUSD seeks to combine the stability of the dollar with the innovative potential of blockchain technology, effectively creating a digital fiat currency. It is issued as an ERC-20 token and supports BEP-2.
Purchasing BUSD: A Step-by-Step Guide
You can acquire BUSD from various exchanges, and for an up-to-date list of exchanges and trading pairs for this cryptocurrency, please refer to our market pairs tab (
https://coinmarketcap.com/currencies/binance-usd/markets
). Additionally, you can purchase and redeem BUSD directly from Paxos: (
https://www.paxos.com/busd/
)
BUSD is fully collateralized by reserves held in either or both (i) fiat currency deposits in dedicated omnibus accounts at insured U.S. banks and/or (ii) U.S. Treasury bills (including through repurchase agreements and/or money-market funds invested in U.S. Treasury bills). This stablecoin has received approval from the New York State Department of Financial Services (NYDFS). BUSD is issued by Paxos Trust Company, LLC (Paxos) in collaboration with Binance, and can be issued and redeemed without incurring any additional fees. Paxos issues BUSD on the Ethereum blockchain. Furthermore, Binance offers a wrapped BUSD token (Binance-Peg) on BNB Chain. Please note: Binance-Peg BUSD is a Binance product; it is not issued by Paxos nor regulated by the New York State Department of Financial Services.
The Versatility of BUSD: Unlocking a Multitude of Use Cases
Notably, Stablecoin’s price stability enables it to play a pivotal role in facilitating seamless transactions, payments, and settlements, while also underpinning the burgeoning ecosystem of Decentralised Finance (DeFi).
Here are some exemplary use cases for BUSD:
- Seamlessly transfer your digital dollars (BUSD) globally in mere minutes, enjoying low costs and the security of blockchain technology.
- Tap into the liquidity of various exchanges and decentralized exchanges (DEX) to trade BUSD.
- Deposit BUSD and earn a competitive interest rate, maximizing your returns.
- Utilize BUSD as a convenient payment method for goods and services.
- Leverage BUSD as collateral or a loan asset, unlocking new financial opportunities.
- Employ BUSD as cross-collateral in Futures, diversifying your trading strategies.
- Safeguard your BUSD holdings by storing them securely on an exchange or in a wallet.
The BUSD Ecosystem: A Comprehensive Framework
The BUSD ecosystem has witnessed exponential growth in 2021, with its market capitalization surging from approximately US$1 billion at the start of the year to a staggering US$14.6 billion by the end of 2021. This remarkable ascent has propelled BUSD to become the third-largest stablecoin by market capitalization, trailing only Tether and USDC. This phenomenal growth can be attributed to the increasing adoption of BUSD by wallets, platforms, and services, as well as decentralized and centralized exchanges (DEXes and CEXes) that have integrated support for the stablecoin.
For those intrigued by yield farming and lending opportunities with BUSD, a plethora of options exist on centralized platforms such as Binance, Blockfi, and Celsius, to name a few. Moreover, prominent DeFi protocols like Venus, Aave, and yearn.finance, among others, also facilitate earning yields on BUSD holdings. A comprehensive overview of the BUSD ecosystem can be accessed
here
.
Paxos Unveils the Assets Underpinning BUSD
In the aftermath of the TerraUSD debacle, a slew of stablecoin issuers have taken steps to voluntarily disclose the assets underpinning their coins. As of June 30, 2022, a staggering 96% of the assets backing Binance USD were comprised of cash and cash equivalents, with the remaining 4% invested in U.S. Treasury bills, as revealed by Paxos.
The company’s entire cash reserves are safeguarded in U.S.-insured depository institutions, whereas cash equivalents are invested in low-risk, short-term instruments, specifically U.S. Treasury bills with maturities of three months or less, or overnight repurchase agreements, which are overcollateralized by U.S. Treasury instruments, ensuring a high level of security and liquidity.
BUSD and the Spirit of Giving: Empowering Philanthropy
In April 2022, Binance made a philanthropic gesture by donating $2.5 million in BUSD through its charity organization to USA for UNHCR, a UN refugee agency, marking the agency’s inaugural stablecoin crypto donation. This pioneering move aptly demonstrated the pivotal role cryptocurrency can play in mobilizing funds and bolstering humanitarian aid efforts.