BUSD is 100% backed by cash and cash equivalents. We work with our partner Paxos to provide full transparency to our BUSD holders. Now we’re excited to introduce our BUSD monthly reserves holding reports to increase public transparency.
What is BUSD?
BUSD is a stablecoin pegged to the US Dollar (USD), issued by Paxos with branding support from Binance. Approved by the New York State Department of Financial Services (NYDFS), BUSD is available for purchase and redemption at a rate of 1 BUSD to 1 USD.
Why do reserves matter?
Stablecoins are digital units of value that rely on stabilization tools and financial reserves to maintain their value relative to another currency or commodity. Not all stablecoins are safe, and there are risks to consider. If a stablecoin fails to maintain its value relative to the reference asset, the consequences might be devastating for users. The primary risk of reserve-backed stablecoins is that some of them can be not fully backed by reserves. This makes reserves transparency fundamental to determining how reliable a particular stablecoin is.
Introducing BUSD monthly reserves holding reports
Binance and Paxos have partnered to offer our customers the most trustworthy and fully regulated reserve-backed stablecoin, BUSD, which comes with the highest standards of security and transparency.
Here’s why BUSD is one of the safest regulated stablecoins available in the market:
1. BUSD is issued by Paxos. Both the token and the company are fully regulated by the NYDFS.
2. BUSD is fully backed by cash and cash equivalents. As BUSD is regulated by a primary prudential regulator, It is and always will be backed only by cash & cash equivalents. BUSD’s cash-equivalents reserves include (1) US Treasury bills with a maturity of less than 90 days and (2) overnight loans secured only by US Treasury securities.
3. The reserves backing BUSD are held in fully segregated, bankruptcy-remote accounts. As the New York Banking Law states, in the unlikely event that Paxos Trust became insolvent, it would not go through standard bankruptcy procedures like other companies. Instead, the Superintendent of NYDFS would return assets held in custody by Paxos Trust to their rightful owners. Paxos Trust holds customer assets safely separate from any corporate funds as a qualified custodian.
On top of all that, starting from July 2022, Paxos is taking another step to increase the public’s trust in BUSD and lead the market in transparency. You can now visit our monthly reserve holdings reports that provide a full statement of instruments backing BUSD here.