What exactly is BUSD?
BUSD is a $1 backed coin that was created by Paxos and Binance. Paxos offers its Stablecoin as a Service product to other companies who wish to start accepting cryptocurrency without risk.
To date, they have also created a gold-backed crypto called PAX Gold (PAXG). The New York State Department of Financial Services regulates both BUSD and PAXG tokens
BUSD provides an easy way to convert funds into fiat without worrying about losing value. It maintains a 1:1 USD peg, with the total supply of BUSD backed by U.S. dollars in Paxos accounts in FDIC-insured banks.
When the US dollar rises or falls, the price for BUSD does too. It is a great example of a stablecoin because it has such a traditional and simple model
BUSD is easier to acquire through either Paxos or Binance, two trusted exchanges. It also has three key advantages: it’s accessible, it’s flexible and it operates rapidly.
You can either buy BUSD through the stored exchange or access our U.S. dollar gateway service to receive freshly minted tokens; alternatively, you can send an amount in U.S. dollars to Paxos to complete this process for you.
The potential benefits BUSD users have are that it offers a fast way to turn crypto into stable assets, along with being able to send money around the world at the lowest cost.
The token exists on three different blockchains- Ethereum, Binance’s smart chain, and Binance’s main chain. Users can spend their tokens on whichever blockchain is most appropriate for their activity of choice. They can do this through withdrawals from the exchange or by swapping through the Binance transfer system.
How does BUSD work?
The mechanism for keeping BUSD’s peg is relatively simple compared to other types of stablecoin. Each BUSD is exchangeable for 1 USD from the reserves. By sending your BUSD to Paxos, they will burn your tokens and provide you with the fiat currency. This mechanism keeps the supply and reserves at a constant 1:1 ratio.
Whenever the price of BUSD begins to move lower than $1 per 1 BUSD, arbitrager traders will purchase BUSD in large quantities. Even a price of $0.98 could provide them an opportunity to make a profit. After purchasing large amounts of BUSD, the arbitragers can then convert the BUSD tokens into fiat through the Paxos platform. An increase in demand for BUSD naturally raises the token price back up to $1, restoring the 1:1 peg.
How is BUSD regulated?
New York state regulators have imposed certain measures on Paxos, Binance, and the way the stablecoin must operate with in their borders. Along with making sure that this token is fully collateralized with US dollars, Paxos must carefully manage the creation and destruction of BUSD tokens.
Paxos is bound by the trust charter and New York banking laws. Paxos has the right to freeze accounts and remove funds if needed due to illegal activity. These principles all adhere to the charter and local laws that apply to stablecoins like Paxos
There is a new function that allows Paxos to enforce NYDFS regulations by setting the law enforcement role. This small piece of code is built into the smart contract of the token.
Why do people use BUSD?
Based on the information we discussed earlier about BUSD, they make for a compelling investment option for cryptocurrency traders.
Avoid price fluctuations in crypto markets
The cryptocurrency markets are volatile. In a similar way to conventional investing, there is a still a need for stable assets in the crypto market – this demand has skyrocketed when the markets have been too unstable.
By converting your assets into fiat or securities, traditional investors can ride out a volatile period. BUSD (Bitshares USD) provides the same opportunity to crypto investors and traders.
Lock in gains without needing to convert to fiat
For investors looking to reap their profits and get out of a trade quickly, BUSD may be the ideal way to go about it. You’ll be able to take your money and deposit it into your bank account without ever needing to transfer funds from an exchange.
When you enter into a new position, or buy another asset, your balance will only reflect the net value of what you’re entering. That means that you can top-up your account with crypto funds even if its current balance is zero.
Arbitrage
The BUSD coin is a popular stablecoin on the Binance Smart Chain. Many automated market makers (AMMs) may provide opportunities when prices from different AMMs differ from one another.
Buying BUSD allows arbitragers to quickly move from exchange to exchange and take advantage of its wide acceptance on different platforms. As mentioned earlier, there may also be arbitrage opportunities through buying BUSD and then cash-out for fiat.
How is BUSD different from other stablecoins?
BUSD is markedly different from other stablecoins for a few reasons. BUSD, unlike most other stablecoins, is fiat-backed meaning that it’s backed by real-world assets like USD or CAD. On the other hand, there are crypto-backed stablecoins like DAI which are backed by cryptocurrency assets.
This is a key point in terms of differences between BUSD and other fiat-backed stablecoins. Paxos does not always reveal the exact amount in reserves but they do release regular audits to show that they have one dollar for every BUSD issued.
The accounting firm Withum will take care of the audit as part of their requirements to certify your cryptocurrency as regulation compliant. Not every project does this, and some fiat-backed stablecoins might not have all the reserves they claim.
For example, the case brought against Tether, indicated that their reserve for a stablecoin was not totally denominated in fiat currencies. This discovery is a direct contradiction to previous statements made by them.
Where & How To Buy Binance USD (BUSD) In The UK
We think either Coinbase or Binance are the best options to get started and buying your Binance USD (BUSD)
You can buy Binance USD (BUSD) directly from binance, with your debit card or a bank transfer.
Binance is a global crypto platform with support for more than 500+ different coins and tokens. So, if you want to trade in various crypto assets, then this is your best option.
Unlike other exchanges, the fees on Binance are really low and affordable which means you can trade without getting burned by high fees.
It is one of the most secure platforms in the world of cryptocurrency trading. There is no need to worry about your money while using this platform because it’s safe and secure.
Binance Exchange is a cryptocurrency exchange. It was launched in 2017 and is one of the largest cryptocurrency exchanges in the world, with over $6 billion trade volume per day.
Binance provides a wide variety of trading pairs such as Bitcoin, Ethereum, and Tether among others. They also provide their own coin – BNB which is traded against other coins on the platform.
There are many reasons why people might use Binance Exchange:
Binance Exchange is a company that specializes in the exchange of digital currencies. A reason that people might use this exchange is for its security. Binance offers two-factor authentication and a secure trading engine for transacting with various cryptocurrencies. This reason makes it one of the safest exchanges out there
.Register on Binance today here.
Buy USD Coin (USDC) on Coinbase
You can buy Binance USD (BUSD) directly from the coinbase app, using your debit card
It is safe to say that there are many reasons for using Coinbase. The most obvious one of course, is the fact that you can buy cryptocurrency at your convenience.
Coinbase is a safe and secure platform for trading cryptocurrency. They provide convenience and security, which is so important when it comes to crypto exchanges.
Coinbase provides a variety of payment options and currencies, which makes it easy for anyone to buy and sell crypto on this platform. You can buy or invest in Bitcoin, Ethereum, Litecoin or Bitcoin Cash with Coinbase.
Cryptocurrency exchanges are websites that allow users to exchange one cryptocurrency for another. If you are not familiar with crypto trading, it is the process of exchanging one type of cryptocurrency for another, or exchanging fiat money for one.
Coinbase offers a simple interface, where you can buy bitcoin, ethereum and litecoin. You can store your coins in the wallet that coinbase provides or transfer them to a wallet of your choice.
Coinbase is probably one of the most popular exchanges in the market because it offers simplified account creation. All you have to do is provide your email address and create a password and voila! You have an account on coinbase exchange crypto
Register on Coinbase today here