What Is Binance USD (BUSD)?
Binance USD (BUSD) is a stablecoin that is pegged to a US dollar at a 1:1 rate. This means that 1 BUSD is approximately equal to $1 and that the BUSD price essentially stays stable.
BUSD was launched by Binance and Paxos on 5 Sep 2019. Binance is one of the most popular crypto exchanges, while Paxos is a regulated blockchain infrastructure platform. The Binance USD token was originally developed based on the ERC-20 token standard. However, there’s also a wrapped version of BUSD based on the BEP-2 standard that runs on the BNB Chain.
The New York State Department of Financial Services (NYDFS) audits the Binance USD crypto project. The audits are completed on a monthly basis and the reports are publicly visible on their website.
Binance USD stablecoin is a worthy competitor of the two biggest stablecoins on the market – Tether and USDC. The market cap of the Binance USD crypto project grew enormously in 2021 from $1 billion to $14.6 billion.
The reason why Binance USD managed to become so popular is that it’s compatible with a huge variety of wallets, exchanges, and various other platforms. The platforms that support Binance USD coins include:
- Decentralized exchanges: Uniswap, Curve Finance, SushiSwap, etc.
- Centralized exchanges: Gate.io, FTX, etc.
- Crypto wallets: Trezor, MetaMask, etc.
- Other platforms: Travala, Moonpay, Wyre, etc.
To see the full list of the platforms that support Binance USD, check out their official website.
The Purpose of Binance USD (BUSD)
Essentially, the main goal of the Binance USD coin (or any other stablecoin for that matter) is to bring the stability of fiat currencies (in this case the US Dollar) to the crypto market. The stability of the Binance USD price makes it a great instrument for reducing the overall volatility of the cryptocurrency market. But take note that even the BUSD price fluctuates a little. The fluctuating range, nevertheless, remains pretty close to $1. See for yourself by looking at the BUSD price chart featured above.
Apart from stabilizing crypto market fluctuations, BUSD can also be used as a loan asset, collateral, or payment method for various products or services. BUSD transactions are completed in a matter of minutes while also keeping the price of transaction fees low. Besides, you can earn an interest rate by depositing Binance USD tokens.
Lastly, note that BUSD can be used for lending or yield farming on Blockfi, Celsius, Binance, and other platforms.