Overview of Binance USD (BUSD)
- Binance USD (BUSD) is a stablecoin backed by short-term treasuries and cash-like assets.
- It rallied to $0.9997 in European morning hours on Wednesday, recovering from a two-year low of $0.9950 hit after the New York Department of Financial Services (NYDFS) on Monday ordered Paxos to stop minting more of the tokens.
- Paxos has already burned more than $700 million of BUSD tokens since Monday.
Connection between Binance and Paxos
Binance CEO Changpeng Zhao clarified that Binance does not issue BUSD, but rather has an agreement to let Paxos use their brand. He also mentioned that the funds are #SAFU and fully covered by reserves in their banks, with their reserves already audited many times by various audit firms.
Regulatory Pressure on BUSD
The regulatory pressure could impact BUSD’s market cap, which will decrease over time. If it ends up being ruled as a security by the courts, it would significantly affect the crypto industry in certain jurisdictions. However, despite this uncertainty, Changpeng Zhao assured users that they will continue to support BUSD for now and be reviewing other projects in those jurisdictions to ensure user’s safety if needed.