What is Binance USD (BUSD)?

What is Binance USD (BUSD)?

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Binance USD is a fiat-backed stablecoin that is pegged in a 1:1 ratio to the United States dollar. For every unit of BUSD, there is a $1 held in reserve. The owner of the project is Paxos, which is responsible for releasing monthly audits on BUSD reserves.

 

Component Binance USD (BUSD)
Technologies Deflationary mechanism, smart contracts
Market capitalization $13 billion+
Open-Source No
Consensus Mechanism None
Smart Contracts Yes
Founders/Authors Charles Cascarilla is the CEO of Paxos
Launch Date 2019
Circulating Supply of Coins 13,052,680,278 BUSD
Maximum Coin Supply None
Mining-based Coin? No
Is Binance USD a Stablecoin? Yes
Does Binance USD have a burn rate? Yes
Does Binance USD have a Whitepaper? None

 

Evolution and Development of Binance USD

Binance USD was launched in September 2019 in a partnership between the Binance cryptocurrency exchange trading platform and Paxos. BUSD was the first stablecoin that was established as a part of Binance’s Venus project.

At the time of its release, it was announced that the NYDFS approved BUSD. The Paxos development team includes individuals who have different backgrounds and levels of experience, from Silicon Valley to Wall Street. 

BUSD was initially launched to improve the overall financial system by creating a global network where cryptocurrencies and other assets can be mobilized, allowing faster and cheaper transactions.

What makes Binance USD unique?

Binance USD is a stablecoin, but it differs from other stablecoins in several ways. BUSD forms part of fiat-backed cryptocurrencies that sees frequent audits being carried out, showing that Paxos has the necessary reserves in USD for every BUSD issued.

Withum carries out these audits as part of the regulatory requirements Binance USD and Paxos must comply with.

What are the main uses for Binance USD?

BUSD is a stablecoin that allows fiat currencies to operate in a digitally dominant world. BUSD is tied to the value of the United States dollar in a 1:1 ratio, which means that BUSD’s price will not fall or rise independently from USD.

BUSD is used as a medium of exchange, and it has the following uses for cryptocurrency traders and investors:

  • It can be used to avoid rapid and drastic price fluctuations in cryptocurrency markets. Users faced with highly volatile market conditions can convert their fiat currencies or other securities into BUSD to ride out the volatile period.
  • It can be used to lock in gains without the user having to convert their profits to fiat. When traders want to close their position, they can use BUSD because it offers a liquid way.
  • BUSD is an extremely popular stablecoin that operates on the Binance Smart Chain and several Automated Market Makers (AMM). These are liquidity pools that offer arbitrage opportunities when the prices differ among various AMMs. When users have BUSD, they can quickly move between different exchanges to benefit from the wide acceptance of BUSD.

What is the future potential for Binance USD?

BUSD has the potential to become a popular investment option and a helpful tool for traders. BUSD is well-regulated, and reserves are frequently audited, providing trust and instilling confidence in the cryptocurrency.

Because it has a high level of reliability, Binance USD can push its way forward to becoming the most popular stablecoin in the alternative coin markets. BUSD is a solid option for those who frequent the Binance Smart Chain and the Binance platform.

Binance USD, as a stablecoin, plays a vital role in digital transactions and different Defi systems. BUSD can be traded against 48 currency pairs, each with a dollar value available around the globe.

BUSD has a versatility that stretches further than just real-world applications. BUSD can be exchanged instantly for other stablecoins in a 1:1 ratio without additional fees. BUSD is interoperable across several platforms, and it can be integrated easily into different DApps and smart contracts.

Price analysis on Binance USD

Binance USD was initially launched in 2019, and its price analysis over the past 3 years are indicated as follows:

 

  2019 2020 2021 to date
BUSD Price High $1.002 $1.05 $1.01
BUSD Price Low $1.0001 $0.97 $0.99
Market Cap $22 M $809 M $14.2 B

 

Price prediction on Binance USD

Binance USD is pegged to the USD in a 1:1 ratio, which means that $1 is set to be equal to 1 BUSD. This means that the price prediction on BUSD is not applicable as its value does not appreciate or depreciate.

Which wallets are the best option for storing Binance USD?

Simply defined, a Binance USD wallet is a piece of software where users store the necessary data to access their Binance USD (BUSD) funds. This data contains a private key, like a password, and a wallet address, also known as a public key, which acts as an account number.

In terms of the types of Binance USD wallets, users can distinguish between the following:

  • Cold Wallets are offline wallets that store funds in an application that is not connected to the internet.
  • Hot Wallets, which are online applications that require an internet connection.
  • Physical wallets are unique pieces of hardware like USB devices that keep crypto funds offline.
  • Web wallets are web browser ad-on wallets.
  • Desktop wallets – which are applications that allow users to manage their finds on macOS, Microsoft Windows, or Linux.
  • Paper wallets are a piece of paper with a code or QR code on them. To access the assets, the user enters the key or scans the code to access their account.

The best wallets for BUSD are:

  1. Freewallet
  2. Guarda
  3. Infinity Wallet
  4. Lumi Wallet
  5. Ledger

 

      1. Freewallet

Freewallet is a multicurrency crypto wallet that can be used on mobile devices as well as web-based platforms. Freewallet was launched in 2016, and it has advanced security protocols to ensure the safety of users’ funds and keys by using multi-signatures, transaction number limits, Two-factor verification, and biometric recognition.

Freewallet is compatible with many cryptocurrencies, including Tether, ZCash, BUSD, NEO, Bitcoin Gold, and several others.

 

      2. Guarda

Guarda is well-known as a secure multi-platform wallet that has online and software wallets that can be used. Guarda offers users encrypted backups, which are stored on the device of the user. Users can easily set up face or ID recognition to add a layer of security.

In addition, Guarda is non-custodial, which means that users’ keys are not kept on the servers.

 

      3. Infinity Wallet

Infinity wallet is a user-friendly and multi-currency wallet that provides users with all they need in a single platform. Infinity wallet is known for its innovation and wide range of features, making Defi adoption easier.

With Infinity wallet, users can trade, transact, view news, monitor their coins, and more from a single interface. Users can connect to any Defi protocol or DApp directly from their desktop, mobile, or the Infinity Wallet interface with Infinity wallet.

      4. Lumi Wallet

The Lumi HD wallet was launched in 2017, and it is a mobile and web wallet that allows users to create unique addresses for every transaction. Lumi supports a wide range of cryptocurrencies, and the network fees charged are competitive.

Lumi Wallet is free to use, and users can easily download and start using the wallet.

      5. Ledger

Ledger offers a wide range of hardware wallets supporting various cryptocurrencies and features some of the most secure storage available. The private keys do not leave the USB device, and transactions must be confirmed manually.

Where can you buy Binance USD?

You can buy BUSD from these exchanges:

      1. Binance

Binance is a Malta-based crypto exchange that has been in operation since 2017. Binance offers more than 150 cryptocurrencies that can be traded and exchanged through proprietary trading platforms, supported on mobile, desktop, and web extensions. 

 

PROS CONS
Offers more than 150 cryptocurrencies that can be traded Unregulated
24/7 multilingual customer support provided There is no telephonic customer support offered
Cryptos can be purchased using a credit card The daily market analysis not provided
Provides a comprehensive training academy Only offers crypto trading

 

      2. Poloniex

Established in 2014, Poloniex is a Seychelles-based exchange that allows users to buy and sell different cryptocurrencies, including TRON, Bitcoin, Ethereum, BUSD, etc.

Poloniex offers a powerful proprietary trading platform that can be used across web browsers and mobile applications. Advanced trading tools are provided, a range of educational resources, and dedicated 24/7 customer support.

 

PROS CONS
A powerful trading platform is provided Unregulated
There is a helpful trader’s blog offered No US clients
24/7 customer support offered No telephonic support offered
Useful tools are offered

 

      3. HitBTC

Established in 2013, HitBTC is a Chile-based exchange developed by experienced system architects and several technology experts. HitBTC is renowned for being one of the oldest and fastest expanding crypto exchanges in the industry.

HitBTC provides traders with over 800 trading pairs in addition to 500 spot instruments spread across different cryptocurrencies. HitBTC also provides innovative trading technology, smooth order execution, a user-friendly interface, and deep liquidity.

 

PROS CONS
There is an intuitive proprietary trading platform offered Unregulated
There is an extensive range of cryptocurrencies offered Only offers crypto-trading
There is the benefit that a minimum deposit is not charged
Useful trading tools are offered to traders of all experience levels.

 

      4. CEX.io

CEX.io is a well-regulated exchange trading platform that is based in the United Kingdom. CEX.io offers comprehensive trading solutions to thousands of traders worldwide, providing a wide range of trading tools that can be used to trade Bitcoin, Ethereum, Stellar, Litecoin, BUSD, and several other cryptocurrencies.

CEX.io is registered in the United States and the United Kingdom as a Money Services Business (MSB), which FinCEN administers. CEX.io has the necessary licensing to provide financial solutions, products, and services.

 

PROS CONS
Well-regulated crypto exchange US clients are not allowed
Intuitive platform offered Only offers crypto trading
There is a range of trading tools offered
24/7 customer support offered

 

      5. itBit

itBit is the first regulated cryptocurrency asset exchange that is owned and operated by Paxos. itBit offers the trade across several cryptocurrencies and provides institutions and professional traders some of the best trading conditions in the industries.

itBit’s regulated nature assures traders that they are safe and that their funds are not at risk when using the platform. itBit offers deep liquidity, competitive trading, non-trading fees, and some of the best API services in the industry.

 

PROS CONS
Accepts US clients Live chat support is not offered
Well-regulated There is a limit on the tradable instruments
A range of trading tools is offered
There is a wide selection of educational materials and tools.

 

Does Binance USD use coin burns?

Binance USD does not burn coins in the same way that other blockchain projects burn coins. The only time Binance USD coins are burnt is when users convert their BUSD tokens for fiat currencies.

When this happens, Binance USD Limited destroys the amount of Binance USD that the user deposits for withdrawal and deposits an equivalent amount of fiat in return.

For instance, if the user wants to convert 200 BUSD, Binance USD funds their account with 200 USD. The 200 BUSD is subsequently burnt and removed from circulation, which means that Binance USD's circulation decreases when users convert their Binance USD to fiat.

Coin burns can simply be defined as the process where coins are sent to a public address where they cannot be spent because the private keys of these addresses are unobtainable.

Coins are burnt for various reasons, including:

  • To create new coins
  • To reward token holders
  • To destroy any coins that were not sold after an Initial Coin Offering (ICO) or a token sale.

What is Binance USD’s largest Competitor?

The biggest competitor of Binance USD is Tether (USDT).

Tether or USDT is a stablecoin that is operated through Bitfinex. Bitfinex is a cryptocurrency exchange based in Hong Kong, and the currency serves on the Ethereum blockchain as an ERC-20 token.

USDT converts fiat currency into digital currency in a 1:1 ratio with the United States dollar. Bitfinex claims that it reserves back all Tether tokens, but there has been a lot of controversy regarding whether this is true. According to market capitalization, there are many criticisms against Tether even though it is the largest and most popular stablecoin.

Binance USD is offered by Paxos, a reputable exchange that is regulated and endorsed by the New York State Department of Financial Services, supported by the Binance cryptocurrency exchange trading platform.

Paxos experiences monthly audit to ensure that reserves are according to the BUSD, which is in circulation. Paxos allows users to buy and sell BUSD at a 1:1 USD ratio. BUSD does not require any operational fees, and it can be used for payments, loans, and a wide range of other transactions where ERC-20 tokens are allowed.

BUSD and USDT differ in the following ways:

  • BUSD is routinely audited to ensure transparency and security, while USDT does not experience rigorous auditing practice. The reserves of USDT can be viewed publicly, but auditing information is not disclosed.
  • Banks in the United States back BUSD tokens, while offshore banks back USDT tokens. While these banks offer lower charges and tax benefits, they are not as secure as FDIC-insured US banks used by BUSD.
  • USDT is more widely available across cryptocurrency exchanges, making it easier to find trading pairs that include Tether. BUSD is expected to become more widely known as people start demanding it more, giving exchanges reason to list it.
  • USDT operates on the Ethereum blockchain, while BUSD can work across different blockchains that support ERC-20 tokens. 
  • USDT has a higher trading volume than BUSD because it has been around much longer.

What can Example intelligent contracts do?

A smart contract can simply be defined as a program that runs on the Solana platform and ecosystem. Smart contracts consist of codes, functions, and data, which is its state, that all reside at a specific address on the Solana blockchain.

The user does not control intelligent contracts. They are deployed to the network and subsequently run as they were programmed.

Smart contracts can define specific rules, like any typical contract, and these rules are automatically enforced through the code. Smart contracts cannot be deleted, and the interactions with them are irreversible.

In terms of necessity, smart contracts are necessary because they help to solve the issue associated with mistrust between different parties as well as business partners.

Smart contracts have several advantages for many industries, and they can reduce unnecessary costs and time expenditure while simultaneously enhancing transparency.

Smart Contracts can be used across several industries, including:

  • Mortgage Contracts
  • Digital Identity
  • Financial Data Recording
  • Supply Chain Management
  • Protecting Copyright Content
  • Insurance, and many others.

Binance USD (BUSD) is an ERC-20 stablecoin issued by Paxos through a public smart contract repository. Smart contracts are used to mint and burn BUSD as coins are bought and sold from different exchanges.

Is Binance USD a Good Investment?

Yes, Binance USD is not an excellent investment to grow wealth.

The price of BUSD is set to stay pegged to the value of the USD, which keeps it in a 1:1 ratio with the USD. This means that BUSD will not appreciate over time, and while this means that investors will not be able to expect a lucrative return on investment, BUSD can be used as a hedge against inflation.

In addition, BUSD is also a safe investment option during times of high market volatility, providing traders with a quick way out of volatile markets before they lose significant amounts. 

What is the supply and distribution of Binance USD?

The Circulating supply of BUSD is 13,052,680,278. There is no total or fixed supply because the supply of BUSD will increase/decrease as users buy and sell coins.

  • Fixed or maximum supply can be defined as the total number of coins that can ever be in circulation.
  • Total Supply refers to the number of coins that have been mined, including the missing coins that are no longer in circulation or that have been lost.
  • Circulating supply refers to the total number of coins that are in circulation.

 

In terms of Unlimited Supply, cryptocurrency coins are inflationary, which means that the cash will inevitably lose value as supply increases, with demand decreasing as a result.

Cryptocurrencies with a limited supply are deflationary, which means that the coins in circulation will gain value over time as demand surpasses supply.

 

Is Binance USD a viable Alternative Coin?

Yes, Binance USD is an excellent alternative coin.

  • Traceability – Binance USD transactions can be viewed publically without divulging the personal information of the trader
  • Hacking – Binance USD and Paxos have not experienced any successful hacking attempts
  • Security – BUSD is extremely safe.
  • Transaction speed – BUSD can be used for quick, cheap transactions.
  • Technology – BUSD uses smart contract technology.
  • Price Stability – BUSD is highly stable because it is pegged to USD
  • Popularity – BUSD is becoming increasingly popular 
  • Future Uses – BUSD could become the largest stablecoin in the market.

What are the differences between Binance USD And Bitcoin?

Bitcoin was launched in 2009 with the idea of it becoming a medium of exchange. Bitcoin is the king of cryptocurrencies with a market capitalization of over $1 trillion, and it is the most popular, secure, and most valuable digital asset in the cryptocurrency market.

Bitcoin has seen widespread adoption, and as of October 2021, more than 15,000 businesses worldwide accept Bitcoin, including prominent companies such as Microsoft, AT&T, and many more.

Bitcoin is known for its high volatility, with prices well over $60,000 per coin. Bitcoin has also seen significant fluctuations in recent years, making some early investors millionaires.

Despite its volatility, Bitcoin is expected to have unprecedented appreciation and growth as the supply diminishes. Investors and analysts are keeping a close eye on the price, which is expected to reach $100,000 in the future.

While Bitcoin is highly volatile, Binance USD is its complete opposite. Binance USD is a stablecoin that is pegged to the US Dollar in a 1:1 ratio. Binance USD is completely unaffected by the market, and it has little to no volatility rate.

BUSD is the perfect hedge against inflation and a safe trading option when there is high volatility in the cryptocurrency market.

 

  Bitcoin Binance USD
Price change 20/21 +$400% +0.15%
Market Cap $1.1 Trillion+ $13 Billion+
Past Hacks None None
Popularity Very High High
Altcoin Rank #1 – Original Crypto #18

 

What are the differences between Binance USD and Ethereum?

While Bitcoin is considered the gold of the cryptocurrency space where its investment potential is concerned, Ethereum is close on its heels.

Ethereum is the best alternative coin in terms of market capitalization, apart from being the first altcoin that emerged after Bitcoin.

Ethereum has extraordinary features and advanced and innovative capabilities. Ethereum was the first programmable blockchain ever created. It was the first that introduced smart contracts to the world, allowing for the trustless self-execution of contracts once conditions have been met, cancelling the need for a facilitator for the contract.

Binance USD uses smart contracts to ensure that transactions can be completed and to mint and burn coins as BUSD is bought and sold. BUSD is a medium of exchange that provides safe, fast, and cheaper transactions.

Binance USD's price is pegged in a 1:1 ratio with the dollar, which means its value is far less than both Bitcoin and Ethereum, but Tether is especially popular because of its stability.

 

  Ethereum Binance USD
Price change 20/21 +880% +0.15%
Market Cap $479 Billion+ $13 Billion+
Past Hacks None None
Popularity Very High High
Altcoin Rank #2 #18

 

What are the differences between Binance USD and Dogecoin?

Dogecoin is a popular cryptocurrency with a massive support structure and an active community called Shibes. Dogecoin was created as a joke surrounding the hype involved with Bitcoin. Dogecoin and BUSD can both be used as a medium of exchange, but both are entirely different.

BUSD is a stablecoin pegged in a 1:1 ratio with the USD, making it a perfect digital alternative to fiat currency where users cannot use fiat, such as on several exchanges where crypto purchases must be made using digital currency.

In addition, BUSD is a good hedge against inflation and a stable option in volatile market conditions.

 

  Dogecoin Binance USD
Price change 20/21 +7,300% +0.15%
Market Cap $29 Billion+ $13 Billion+
Past Hacks None None
Popularity High High
Altcoin Rank #10 #18

 

What are the differences between Binance USD and Neo?

NEO is a blockchain-based platform that enables for DApps and smart contracts to be developed on its platform. NEO offers a continuous development model, with NEO 3.0 aims to enhance security and allow for more transactions to be processed per second.

NEO uses two native tokens, namely NEO and GAS. NEO is the investment token that allows users to participate in governance on the blockchain. GAS is used to pay transaction fees on the network.

BUSD is a stablecoin that allows users to pay for goods and services using digital currency. BUSD can be bought, sold, and traded across different exchanges. Its main use is a hedge against inflation and a medium of exchange as a currency, providing users access to Defi and DApps across other platforms.

 

  NEO Binance USD
Price change 20/21 +160% +0.15%
Market Cap $2.90 Billion+ $13 Billion+
Past Hacks None None
Popularity Medium High
Altcoin Rank #57 #18

 

What are the differences between Binance USD and NFTs?

Non Fungible tokens (NFTs) are digital assets that each have a unique value, with no two NFTs holding the same characteristics or value as another. Binance USD, on the other hand, is fungible, which means that one BUSD has the same weight and attributes as another BUSD.

What are the differences between Binance USD and Solana?

Solana is a blockchain network that aims to develop an ecosystem that consists of cryptocurrency-powered products and services. Solana differs from Litecoin and Bitcoin but has similar features to Ethereum.

Solana is well-known for its lightning-fast transaction speeds of more than 50,000 transactions per second, more than Ethereum and Bitcoin combined, all this at a fraction of the cost.

In addition to this, Solana is versatile, and it allows developers to write and launch customizable applications in a wide range of languages on its proprietary blockchain. SOL, Solana's native token, can be used to pay for the execution of programs and to send transactions.

BUSD is one of the most popular stablecoins that is experiencing widespread adoption because of its regulated nature and the fact that there are monthly audits carried out on the reserves of Paxos. BUSD is a perfect hedge against inflation and a safe option during times of high market volatility.

 

  Solana Binance USD
Price change 20/21 +9,300% +0.15%
Market Cap $59.35 Billion+ $13 Billion+
Past Hacks None None
Popularity Very High High
Altcoin Rank #6 #18

 

What are the differences between Binance USD and Cardano?

One of the inherent differences between Binance USD and Cardano is that BUSD is a stablecoin pegged against the dollar’s value in a 1:1 ratio.

On the other hand, Cardano is a powerful and popular open-source platform where smart contracts can be run. Different Decentralised Applications (DApps) can be created and launched using ADA coins, the native token for Cardano to cover transaction fees.

Cardano is the top smart contract platform after Ethereum. It is in constant competition with Tether regarding market capitalization, with the two competing for the place as #4 on the alternative coin list.

Cardano employs a Proof-of-Stake consensus mechanism to secure its network, allowing users to stake their ADA coins. Cardano is reliable, safe, and transparent, and it is one of the first projects created with a peer-reviewed system.

BUSD is a perfect hedge against inflation and an easy way for users to convert their fiat currency to digital currency, allowing them access to Defi and DApps across different blockchains, including Cardano.

 

  Cardano Binance USD
Price change 20/21 +2,100% +0.15%
Market Cap $59.54 Billion+ $13 Billion+
Past Hacks None None
Popularity Very High High
Altcoin Rank #5 #18

 

What is Stablecoin?

A stablecoin can simply be defined as a cryptocurrency that offers increased price stability by pegging its market value to another source, such as gold or the US dollar.

Stablecoins serve as a bridge between the cryptocurrency world and paper or fiat currencies. By using the flexibility that digital currencies offer in combination with the stability of traditional assets, users can benefit from the security, instant transaction settlements, and more.

Stablecoins can be divided into three main categories, namely:

  1. Fiat-collateralized Stablecoins
  2. Crypto-collateralized Stablecoins
  3. Non-collateralized Stablecoins
  4. Commodity-collateralized stablecoins

Is Binance USD a Stablecoin?

Yes, Binance USD is a stablecoin.

Is it safer to transact on the Paxos platform when trading BUSD than any other platform?

Yes, the Paxos proprietary trading platform, itBit, is the first regulated cryptocurrency asset exchange owned and operated by Paxos.

itBit is regulated by the New York State Department of Financial Services, which inspires trader and investor confidence that the platform is safe and legitimate, especially considering that the cryptocurrency market is unregulated. itBit offers a wide range of trading tools and a selection of education.

In addition to BUSD, users have access to several other major digital currencies to exchange for other cryptocurrencies.