Binance Launches Native Dollar-Backed Stablecoin
The Binance USD (BUSD) stablecoin was given the green light by the New York State Department of Financial Services (NYDFS).
Binance will add another stablecoin to the mix, this time its native dollar-backed asset, the Binance USD (BUSD). The new stablecoin was created with the full approval of the New York State Department of Financial Services (NYDFS). The asset will be issued in partnership with the Paxos Trust Company, the producer of PAX, one of the most widely used stablecoins.
“Paxos is leading the digital trusts space and we are excited to work with them in developing our native stablecoin,” said Changpeng “CZ” Zhao, CEO of Binance. “We hope to unlock more financial services for the greater blockchain ecosystem through the issuance of BUSD, including more use cases and utility through the power of stable digital assets.”
BUSD will be offered on the Paxos platform for 1:1 redemption against the US dollar. On Binance, the asset will start with markets against Bitcoin (BTC), Binance Coin (BNB), and Ripple (XRP).
“NYDFS’s approval of BUSD is a vital step towards long term stability in global crypto markets. We are proud that our stablecoin as a service offering enables trusted companies like Binance to introduce products customized for their users. The Paxos brand symbolizes regulatory integrity, consumer protection and transparency for all of our partners,” said Rich Teo, Paxos co-founder and CEO for Asia.
Binance currently supports most widely accepted stablecoins and is also one of the biggest holders of Tether (USDT), the most widely used dollar-pegged coin. Binance has already issued a British pound-backed stablecoin to work on its decentralized exchange, Binance DEX.
Due to the high trading volumes on Binance, stablecoins have increased their turnover. High demand led to each PAX coin turning over 1.3 times in a 24-hour period. TrueUSD (TUSD) moves 1.69 times each day, meaning the coins’ entire supply may grow to meet demand.
Smaller stablecoins backed by US dollars are often used as a fiat off-ramp for USDT, which is still not directly redeemable. Currently, redemptions have lowered the supply of Gemini USD (GUSD) down to around 9 million coins. Other stablecoins have grown their supply more significantly, with USDC carrying more than 450 million coins.