What Is Binance USD?

About Binance USD (BUSD)

BUSD is a classic stablecoin, which is pegged to the U.S. dollar in 1:1 ratio. The main goal of this asset is to provide an opportunity for users to protect their savings from volatility by swapping them into stablecoins while at the same time staying within the blockchain.

The mechanism of this stablecoin is rather simple. 1 BUSD costs 1 U.S. dollar. Whenever users buy exchanges BUSD via Paxos, their tokens are burnt and they receive fiat. If for some reason the price of BUSD goes below $1, the arbitrager traders are to help. They purchase a significant amount of coins to exchange them for fiat, increase the demand for BUSD, and thus stabilize the price.

It is important to note that BUSD is operating under the New York State regulations, which were forced on Binance as well as on Paxos. So naturally, all the actions that may happen with stablecoin are carefully controlled, including creation and burning. Consequently, this gives the right to both Paxos and Binance to freeze accounts that demonstrate any kind of illegal activities.

Where did Binance USD (BUSD) come from?

BUSD was launched in September 2019. It is a result of collaboration between Paxos and Binance.

Binance is the well-known biggest cryptocurrency exchange in the world. The mission of the project is to grant people freedom of earning, holding, and sharing of money they possess regardless of the location.

Paxos Trust is a blockchain company, which specializes in trading, custody and licensing. Its main goal is to provide crypto solutions for the world’s financial institutions. Paxos emphasizes the safety and security of all the services they offer. For example, they claim that all the assets listed on the platform have gone through a rigorous evaluation and analysis process.

What are the advantages of Binance USD (BUSD)?

1. Funds mobility
   
   With BUSD it is extremely easy to send money all around the world, avoiding bank service delays.
2. Low fluctuation
   
   Stablecoins are meant to save assets from the crypto market volatility without the necessity to exchange them for fiat.
3. Audits
   
   Paxos issues regular audits to prove that the BUSD to dollar ratio stays the same.
4. Useful for trading
   
   BUSD helps to secure the gains between trading operations. It can be a good way to wait for the next trading position without losing time for changing into fiat and then back to crypto.

What are the disadvantages of Binance USD (BUSD)?

1. Lack of anonymity
   
   Binance does not allow any anonymous actions, so it is important to keep in mind that it is necessary to go through verification before it will be possible to use it.
   
2. Account freezing
   
   Binance and Paxos are regulated, so if actions are considered to be disturbing for some reasons, the account of the user can be frozen.

How to buy Binance USD (BUSD)?

If you would like to try out all the opportunities provided by BUSD, you need to purchase some coins. To do so, please, come to SimpleSwap and follow the instructions below:

1. Let’s assume, you plan to exchange BTC for BUSD.
2. Select the crypto you wish to exchange (BTC) in the 1st drop-down list. Insert the number you want to swap.
3. Choose BUSD in the 2nd drop-down list. You will see the estimated amount that you’ll receive after the swap.
4. Click the Exchange button.
5. Enter the Recipient's Address. BUSD will be sent to this address. Be careful and make sure you use the correct address.
6. Create the exchange.
7. You will see the BTC deposit address. You have to transfer the necessary amount of BTC to this address to start the exchange.

You are also welcome to buy or sell BUSD for fiat!

SimpleSwap reminds you that this article is provided for informational purposes only and does not provide investment advice. All purchases and cryptocurrency investments are your own responsibility.