Binance USD (BUSD) is a newly inducted USD-dominated stablecoin pegged to the dollar on a constant 1: 1 policy and approved by the New York State Department of Financial Services (NYDFS) in the year 2015. It is a fully-backed token founded by Binance and Paxos that operates on blockchain technology to offer the stablecoin as an alternative digital currency to individuals and external companies.
Accessibility, flexibility, and speed are the three core benefits this stablecoin aims to offer its holders. Accessibility refers to the level of availability and usability in the cryptocurrency market; BUSD token satisfies the accessibility aim as it can be purchased on popular exchange platforms and can also operate on three different blockchains (Ethereum, Binance smart Chain, and Binance Chain). This level of accessibility allows users to access their coins easily on different blockchain networks.
As a Binance-oriented stablecoin, users can easily turn their holdings and other digital tokens into BUSD without moving off the blockchain. It also allows users to transfer and receive BUSD tokens without the need of converting them into other tokens.
Binance USD has the same operating mechanism as similar stablecoins like USDC and USDT. Since it has the approval of the NYDFS and operates on a constant 1:1 policy, one token of BUSD equals the price of a one-dollar bill (i.e. 1 BUSD = $1)
Although it is pegged to the dollar and maintains a constant $1 price, the BUSD token can fall below the stipulated figure. If this happens, arbitrager traders will be deployed to purchase BUSD tokens in large quantities, as this situation is an opportunity to make a profit and the purchased coins will then be converted to fiat currencies on the Paxos platform. Since there is a mass purchase of BUSD coins; this will raise the request for the stablecoin, leading to an increase in price returning it to the regular one dollar.
The stakeholders of Binance USD token releases regular audits that prove the United States reserves match the supply of BUSD, this regular audit release gives BUSD an edge over other stablecoins. Unlike stablecoins like Tether whose financial records recently debunked the “1 USDT token equates $1” claim; the transparency exhibited by BUSD has attracted thousands of crypto holders and encouraged them to purchase and hold more BUSD tokens.
Who are the Founders of Binance USD (BUSD)?
Binance and Paxos are the major founders of the Binance USD token. Binance serves as the developer while Paxos is the issuer and custodian.
Binance is a popular cryptocurrency exchange platform founded by Changpeng Zhao and Yi He and the developer of the BUSD coins. It was founded in 2017 and has its headquarters in Seychelles; they are the developers of the BNB coin, Binance Smart Chain, and Binance USD.
Paxos is a blockchain infrastructure platform that uses blockchain technology to tokenize, trade, and settle assets for external enterprises or clients. They provide a platform for new and existing FinTech and other financial institutions to offer their users crypto capabilities through their crypto brokerages.
What is Binance USD (BUSD) used for?
Buying and Selling
BUSD tokens can be bought and sold directly with no need of converting them into other accepted crypto tokens. This feature saves the users from stress and any additional services fee the platforms may be incurred during conversion.
Arbitrage
It is one of the highly popular stablecoins on Automated Market Makers used as an arbitrage opportunity for users. Holding BUSD tokens allows arbitrage buyers to move quickly between exchanges and allows them to take advantage of BUSD’s financial position. It allows buyers to take advantage and make fast profits before the market closes up.
Holding
The feature of stablecoins is the stability of its price and its unresponsiveness to the changes in the cryptocurrency market. This feature BUSD possesses makes it the go-to coin for traders to lock in their gains without needing to convert them to fiat currencies, as they are the digital emblem of fiat currencies.
What Is the Unique Point of Binance USD (BUSD)?
It is backed by the NYDFS
The New York State Department of Financial has given its 100% approval and recognizes BUSD as a US dollar-backed coin. This approval gives it an edge over other stablecoins as users can comfortably purchase and trade with the tokens with no fear.
Regular auditing
Regular auditing is one of the most highlighted unique points of BUSD. The Paxos Company has collaborated with Withum, a recognized top-ranking auditing firm, to verify independently at random times that the whole supply and purchase of BUSD tokens is equal to the figures of USD in the reserve accounts held by Paxos in United States banks.
This auditing is a monthly activity performed by officials in Withum and gauged according to the standards of AICPA (American Institute of Certified Public Accountants).
Regulated
The stablecoins are regulated by the NYDFS, which ensures that every financial action taken by Binance and Paxos favors the customer’s interest and investment.
Zero Charges
Binance and Paxos do not charge a fee for the purchase and redemption of BUSD coins, although banks and other private may require additional charges.
Fast and Global transaction
The token is supported on both ERC- 20 and BEP-2 platforms, which can be easily accessed globally. Fiat dollars and BUSD tokens can be transferred anywhere in the world in few minutes.
How many Binance USD (BUSD) is in circulation?
There are approximately 12.1 billion BUSD tokens in circulation and a market capitalization value of $9.6 billion as of June 2021.
Is the Binance USD (BUSD) Network secured?
The BUSD network is very secure and regulated by recognized associations, as there has been no recorded case of theft or activities of hackers. Asides from being recognized as the stablecoin pegged to the dollar bill, NYDFS also enforces regulatory measures that control the financial operation of the coin.
Paxson has the right to freeze the account and remove funds with traces of illegality and every financial action must adhere to the principles of the Trust Charter and New York banking laws.
How do I buy Binance USD (BUSD)?
For new and existing crypto traders who would love to purchase BUSD tokens, there are several ways and they are:
Through fiat currency
The flexibility BUSD token offers allow it to be purchased with a local currency. Paxson can accept a direct transfer of funds and also has several connected financial applications that can allow users to wire funds to them for the purchase of BUSD tokens.
Through Paxson services
Signup to be a member/user by providing necessary details about you like: name, e-mail, verified licenses, and profile picture.
Input the required details of the information engraved on your debit/credit card and get the tokens (ensure you are connected to a stable and fast internet connection)
If you use private financial platforms like Paypal and Payoneer, link your account to that on the website and pay to get the tokens.
After successful sign-up, wire your desired amount of US dollars and exchange them for BUSD tokens.
Through the Binance exchange platform
Register and sign up to be a Binance user and provide necessary details similar to that of the Paxson service and purchase BUSD directly.
Through exchange
You can also exchange your other coins and tokens for an equal amount of BUSD tokens on the Binance platform. Transfers your tokens to a private hot or cold wallet for extra security.
Which Cryptocurrency Wallet Supports Binance USD (BUSD)?
The PTPWallet platform supports many cryptocurrencies simultaneously such as BUSD tokens. Because of its vast use case, it has grown to become one of the most used platforms as it serves as an exchange and an engine to discover other cryptocurrencies. Additionally, users can easily use PTPWallet as their Binance USD wallet because offers a simple and interactive interface making it easy for people to navigate its system.
