What is BUSD?
You will no doubt have understood it : the B of BUSD refers to the company Binance, which launched this crypto. The said launch took place in 2019, and marked a new stage in the diversification of stablecoins.
As a reminder, a stablecoin – unlike a classic crypto (Bitcoin, Ethereum) shows negligible volatility, because its value follows that of the US dollar.
But let’s take a closer look at BUSD as such.
Ranked #3 among stablecoins (USDT being the first; USDC the second), it climbs to 6th place in terms of capitalization among all cryptocurrencies.
This rapid and obvious success is undoubtedly linked to the excellent reputation of Binance, which appears to be a benchmark in its field.
The platform of this company, dedicated to the exchange of very many digital currencies, is the most popular in the world.
In addition, the regulatory system to which the BUSD is subject is particularly developed, thanks to the support of certain American banks and institutions; we will develop this aspect later.
BUSD Binance : how does it work?
The BUSD crypto has a particularity: it is not backed by virtual currencies such as Bitcoin or Ethereum. All reserves exist in the form of real money, the funds of which are held by Paxos (in some cases, it can also be bonds).
Thus, each unit of BUSD finds its direct and exact cash equivalent.
We are therefore faced with a crypto that offers a good compromise between the classic digital variants (Bitcoin, Ethereum, etc.) and sovereign currencies (in other words, money issued by a state). Users can take advantage of the advantages of decentralized currency while protecting themselves from the risks assumed by a volatile cryptocurrency.
Let us add that this correspondence between the existence of a dollar and that of a stablecoin from Binance is completed by a particularly elaborate guarantee and control system.
How is the BUSD regulated ?
The BUSD is indeed strictly regulated. The operations guaranteeing its integrity and regularity are centralized in New York.
Specifically, the creation, circulation, and value of Binance BUSD is verified under the New York State Department of Financial Services (NYSDFS). Created in 2011, this organization has an important role to play in the field of cybersecurity. It acts as a mediator and regulator.
But that’s not all. Binance, through Paxos Trust Company, has commissioned an independent firm named Withum to issue monthly attestations as to the effective liquidity reserves.
All reports are scrupulously published on the official Paxos website, including a concern for transparency and continuous communication.
We can go so far as to speak of geographical consistency: all the banks containing the reserves essential to maintaining the USD/BUSD equivalence are American. As for the headquarters of Paxos, it is located in New York.
All this contributes to making BUSD Binance one of the safest cryptos, whether thanks to the very regular audits or by virtue of this, so to speak, centralized organization. What may seem paradoxical in the context of a virtual currency in general is in this case part of its DNA.
How to buy BUSD ?
To buy BUSD, of course, you can go through the Binance platform. Moreover, some use it for trading via the native platform, since it allows you to operate free of charge (or at very low cost) on the financial markets.
It is also possible to carry out transactions reliably on certain partner sites. This is particularly the case with BitTorrent (or even the airline Air Baltic!).
In any case, do not forget that it is possible to carry out exchanges and conversions – for example to obtain a fiat (regular currency).
Outside of Binance, you have the option of acquiring BUSD on Hotbit, or even CoinTiger.
BUSD vs USDT vs USDC
Now we have to compare the BUSD to the other two most famous stablecoins to understand the differences.
BUSD or USDT ?
USDT remains stable overall, but audits are less regular and Tether, the founding company, has found itself at the heart of some controversies – it has notably been criticized for a lack of transparency regarding the effectiveness of its reserves.
The BUSD, since it was designed to function as an extremely controlled and secure stablecoin, should never lead to unpleasant surprises for investors.
However, USDT stands out in terms of trading volume and capitalization. It’s more popular and works as a payment method on more sites and services.
BUSD or USDC ?
The stablecoins BUSD and USDC are both based on the pursuit of greater transparency – knowing that BUSD Binance assumes an even more zealous system with its strict dollar equivalence.
Again, USDC circulates more than BUSD – it is actually used more significantly in trade.
All in all, the two cryptos are equal; your choice will be one rather than the other depending on your expectations and your habits. If you already have an active account on Binance, for example, maybe its local stablecoin will satisfy you.
The BUSD : a particularly supervised stablecoin
If we had to retain a typical characteristic of the BUSD, it is therefore its very elaborate audit and monitoring system, and its institutional and geographical attachment to the USA.
Overall, it is a very reliable crypto, which lends itself to secure transactions even if the platforms accepting it as a means of payment are not yet very numerous. If you are looking for a virtual currency with very low volatility, which is the result of a serious project and in particular allows you to trade free of charge on Binance, so do not hesitate to look into this alternative.
