What is Binance USD (BUSD)
As a stablecoin tied to the US dollar, Binance USD (BUSD) is intended to have a value equal to one US dollar. It is issued by Paxos Trust Company and redeemable for US dollars at a 1:1 ratio.
On a number of cryptocurrency exchanges, including Binance, one of the biggest cryptocurrency exchanges in the world, Binance USD can be traded. The stablecoin is frequently used by cryptocurrency traders and investors to transfer money between exchanges or as a strategy to protect against market volatility.
The history of Binance USD (BUSD)
In collaboration with Paxos Trust Company, Binance, one of the biggest cryptocurrency exchanges in the world, introduced Binance USD (BUSD) in September 2019. Stablecoins were developed to give investors and traders a secure and transparent alternative to trade cryptocurrencies against the US dollar without having to transfer their assets to fiat money.
Binance USD has been created to adhere to legal specifications and is regularly audited to make sure it is completely backed by US dollars. The New York State Department of Financial Services (NYDFS) has approved the stablecoin, and it is now tradeable on a number of cryptocurrency platforms.
Since its introduction, Binance USD has become more well-liked among investors and traders who value the predictability and stability of a USD-pegged asset in the erratic cryptocurrency market. It has also grown in popularity as a way to send money between exchanges and receive payments in digital assets.
How Binance USD (BUSD) works
Users can acquire BUSD through various businesses that support it or they can buy it on a cryptocurrency exchange like Binance or Paxos that supports the token. Once a user obtains BUSD, they can use it to make payments, hold it as a store of value, or exchange it for other cryptocurrencies.
The Paxos Trust Company, which is in charge of the issuance and redemption of BUSD tokens, is where users can exchange their BUSD for US dollars. In exchange for the user sending BUSD to Paxos, the latter will transfer an equal number of US dollars to the user’s bank account. By following this procedure, the value of BUSD is always supported by an equivalent quantity of US dollars that are kept in reserve, ensuring its stability.
Because Binance USD is based on the Ethereum blockchain, it can be sent and received with ease. It is also an ERC-20 token, making a variety of cryptocurrency wallets and exchanges compatible with it. This makes BUSD a practical and accessible tool for traders and investors to transfer money across different exchanges or as a way to protect against market volatility.
Can Binance USD (BUSD) be trusted
A regulated financial institution with the right to store and custody US dollars, Paxos Trust Company, holds US dollars in reserve for Binance USD (BUSD), a stablecoin that is fully backed by US dollars. This indicates that the value of BUSD is fully supported by an equivalent number of US dollars held in reserve, demonstrating that BUSD can be relied upon to maintain its peg to the US dollar.
Additionally, the New York State Department of Financial Services (NYDFS) has approved Binance USD, and it is regularly audited to make sure that it is fully backed by US dollars. Independent third-party companies carry out these audits to make sure that the amounts held in reserve correspond to the total number of BUSD tokens in use.
Additionally, Binance USD was created to adhere to legal specifications, so it is bound by anti-money laundering (AML) and know-your-customer (KYC) laws. This verifies that the stablecoin is being used lawfully and helps to prevent fraudulent activities.
In general, Binance USD can be relied upon as a trustworthy and open stablecoin that upholds its peg to the US dollar and is backed by US dollars kept in reserve by a licensed financial institution.
How to get Binance USD (BUSD)
There are several ways to acquire Binance USD (BUSD):
- Purchase on a crypto exchange: BUSD may be traded on a number of platforms, including Binance, Paxos, and others. You must register for an account on one of these exchanges, go through the KYC/AML verification process, and then deposit money into your account in order to purchase BUSD. When you have money in your account, you can buy BUSD with it.
- Purchase using a service that accepts BUSD: A number of services also let you purchase BUSD with fiat money or other cryptocurrencies. BUSD is supported by a number of well-known services, including Simplex, Coinify, and MoonPay.
- Redeem for US dollars: Paxos Trust Company, which is in charge of the creation and redemption of BUSD tokens, is where you may exchange your BUSD for US dollars. You must provide Paxos the equivalent amount in BUSD, and they will transfer the US dollars to your bank account in return.
Once you have BUSD, you can use it to make payments, keep it as a store of value, or exchange it for other cryptocurrencies. Additionally, because it is an ERC-20 token, it can be kept in digital currency wallets that work with the Ethereum blockchain.