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BUSD is a stablecoin issued by Binance and Paxos, regulated by the New York State Department of Financial Services. It is fully backed by reserves including cash and U.S. Treasury bills. This digital asset facilitates global transactions, payments, and Decentralised Finance activities while maintaining a one-to-one peg with the US dollar.
Binance USD (BUSD) is a stablecoin pegged 1:1 to the US dollar, issued by Binance in collaboration with Paxos. It holds approval and regulation from the New York State Department of Financial Services (NYDFS), and its Monthly Audit Report is accessible via the official website. Introduced on 5 Sep 2019, BUSD seeks to combine blockchain technology with the stability of the dollar. This digital fiat currency is issued as an ERC-20 token and also supports BEP-2.
You can purchase BUSD on exchanges; for the most up-to-date list of trading pairs and platforms, visit our market pairs tab. You may also buy and redeem BUSD directly through Paxos.
BUSD is 100% backed by reserves held in either or both (i) fiat cash 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). The New York State Department of Financial Services (NYDFS) approves BUSD. Paxos Trust Company, LLC (Paxos) issues BUSD on the Ethereum blockchain in partnership with Binance, allowing for issuance and redemption without any extra fee. Binance also 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.
BUSD Use CaseGiven its price stability, this stablecoin serves a key function in transactions, payments, settlement, and Decentralised Finance (DeFi).
Common BUSD use cases include:
The BUSD ecosystem saw exponential growth in 2021. The stablecoin’s market capitalization increased from around US$1B at the start of 2021 to over US$14.6B at the end of 2021. This positions it as the third largest stablecoin by market cap, behind Tether and USDC. This expansion is largely attributed to increased user adoption as wallets, platforms, services, DEXes, and CEXes support BUSD.
For users seeking yield farming and lending opportunities with BUSD, it is available on centralized platforms such as Binance, Blockfi, and Celsius, among others. Leading DeFi protocols like Venus, Aave, yearn.finance, and more also permit users to earn yield on their BUSD. A complete overview of the BUSD ecosystem can be found here.
Paxos Reveals Assets Backing BUSDFollowing the TerraUSD saga, several stablecoin issuers have begun disclosing the assets backing their coins. As of June 30, 2022, 96% of the assets backing the Binance USD were held in cash and cash equivalents, while 4% were invested in U.S. Treasury bills, according to Paxos.
All of the company’s cash balances are maintained in U.S.-insured depository institutions, while the cash equivalents are held in “U.S. Treasury bills with maturities of 3 months or less, or overnight repurchase agreements, overcollateralized by U.S. Treasury instruments.”
BUSD and CharityIn April 2022, Binance donated $2.5 million in BUSD through its charity organization to USA for UNHCR, a UN refugee agency. This represented the agency’s first stablecoin crypto donation. The action highlighted how cryptocurrency can play a key role in raising funds and supporting humanitarian aid.