Price Data, Market Cap & News for Binance USD ($BUSD) Cryptocurrency

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Description of Binance USD

Headlines are updated in real time. Click on a headline to the left to read the news.

A Brief Introduction to Binance USD

Binance USD (BUSD) is a type of digital currency known as a stablecoin. Stablecoins are unique in the cryptocurrency world because their value is pegged to a reserve of assets, in this case, the US dollar. This means that one BUSD is always equivalent to one US dollar, providing stability in the often volatile crypto market.

The Creators and Major Contributors

Binance USD was created through a partnership between Binance, one of the world's largest cryptocurrency exchanges, and Paxos, a regulated financial institution dedicated to digitizing assets. Paxos issues BUSD on the Ethereum blockchain, while Binance offers a wrapped BUSD token on the BNB Chain.

Token Supply

The supply of Binance USD is not capped or limited. Instead, new BUSD tokens can be created or 'minted' whenever someone purchases them with US dollars. Similarly, BUSD tokens are 'burned' or removed from circulation whenever they are redeemed for US dollars. This ensures that the number of BUSD tokens in circulation always corresponds to the amount of US dollars held in reserve.

Purchase Locations

Binance USD can be purchased directly from Paxos or from various cryptocurrency exchanges. It's important to note that the availability of BUSD may vary depending on the exchange and the country of the user.

Common Uses

Thanks to its stability, BUSD is commonly used for transactions, payments, and settlements in the digital world. It's also a popular choice for Decentralized Finance (DeFi) applications, which aim to recreate traditional financial systems with cryptocurrency. In addition, BUSD can be used for trading against other cryptocurrencies, providing a stable point of reference in price fluctuations.

Latest News and Developments

The BUSD ecosystem has seen significant growth in recent times. Its market capitalization grew from around US$1B at the start of 2021, to over US$14.6B at the end of the year, making it the third largest stablecoin by market cap. This growth can be attributed to increased user adoption as more wallets, platforms, and services began supporting BUSD.

In other news, Paxos recently disclosed the assets backing BUSD. As of June 30, 2022, 96% of the assets were held in cash and cash equivalents, while 4% were invested in U.S. Treasury bills. This transparency is a positive step towards building trust in the stablecoin market.

Regulatory Challenges for Binance USD

Recent news about Binance USD has been dominated by regulatory issues. The US Securities and Exchange Commission (SEC) and the New York Department of Financial Services (NYDFS) have raised concerns about the stablecoin, with the NYDFS ordering Paxos, the issuer of Binance USD, to stop minting new tokens. The SEC has also suggested that Binance USD could be classified as a security, which would have significant implications for the crypto industry.

Market Response and Impact

These regulatory challenges have had a noticeable impact on the Binance USD price and its position in the market. Over 7 billion Binance USD tokens have been redeemed since Paxos announced it would stop minting new ones. This has led to Binance USD falling out of the top ten cryptocurrencies by market capitalization. Binance USD's market cap has dropped below $10 billion, and the number of tokens in circulation has also fallen significantly.

Changes in Binance USD Management

In response to these developments, Binance has made some changes in how it manages Binance USD. The company has replaced Binance USD holdings in its Secure Asset Fund for Users (SAFU) with other stablecoins. Furthermore, Binance CEO Changpeng Zhao has stated that Paxos will continue to service Binance USD and manage further redemptions.

Impact on Binance's Market Share

Despite the issues with Binance USD, Binance's overall market share has actually increased. The company's spot market share among top-tier exchanges rose to 61.8% in February, and its market share across derivatives exchanges also grew to 62.9%. This suggests that while the recent news about Binance USD has been challenging, it hasn't significantly impacted Binance's overall position in the crypto market.