Binance USD (BUSD): A Comprehensive Guide to the Stablecoin Backed by the US Dollar

Binance Dollar: Everything you need to know

Binance USD (BUSD) is a type of cryptocurrency that is backed by the US dollar. This means that for every BUSD coin that exists, there is one US dollar held in reserve by a trusted third party. The purpose of BUSD is to provide a stable and reliable way of exchanging value on the blockchain, without being affected by the price fluctuations of other cryptocurrencies. BUSD is issued by Binance, one of the largest cryptocurrency exchanges in the world, in partnership with Paxos, a regulated financial institution based in New York. BUSD is approved and overseen by the New York State Department of Financial Services (NYDFS), which ensures that BUSD follows strict rules and standards for consumer protection, security, and transparency. BUSD is also audited monthly by a third-party accounting firm to verify that the amount of BUSD in circulation matches the amount of US dollars in reserve.

BUSD works by using smart contracts on the Ethereum blockchain, which are self-executing agreements that enforce the rules and conditions of BUSD. Anyone who wants to use BUSD can buy or sell it on Binance or other platforms that support it, such as Coinbase, Kraken, or Bittrex. BUSD can also be transferred to any Ethereum wallet that supports ERC-20 tokens, which are a standard format for creating and interacting with tokens on the Ethereum network. BUSD can be used for various purposes, such as trading, investing, saving, lending, borrowing, or paying for goods and services. BUSD can also be exchanged for other cryptocurrencies or fiat currencies at any time, depending on the market demand and supply.

BUSD is one of the most popular and widely used stablecoins in the world, with a market capitalization of over $2.5 billion USD and a daily trading volume of over $500 million USD2. BUSD offers several advantages over other stablecoins, such as:

Low fees: BUSD has a very low transaction fee of 0.1% on Binance, compared to other platforms that charge higher fees for using stablecoins.

High liquidity: BUSD has a large and active user base, which ensures that there is always enough supply and demand for BUSD on the market.

Regulatory compliance: BUSD follows the rules and regulations of the NYDFS and other authorities, which gives users more confidence and trust in using BUSD.

Transparency and security: BUSD is regularly audited and verified by independent parties, which ensures that BUSD is always backed by real US dollars and protected from fraud or manipulation.