The world’s largest cryptocurrency market shares data on the funds behind its stablecoin, which is pegged to the US dollar.
In a new announcement, Binance said it will provide regular updates on the reserves behind the popular Binance USD (BUSD).
The move comes after the collapse of several digital assets and affiliated projects this year while causing losses estimated at tens of billions of dollars worldwide.
Binance claims that unlike other so-called stablecoins, BUSD is not only “100% cash and equivalent backed” but is also regulated and approved by the US Department of Financial Services. New York State (NYDFS).
BUSD was launched in 2019 by Binance and Paxos and is currently the sixth largest crypto asset with a market capitalization of over $17.8 billion.
According to the advertisement,
“If a stablecoin fails to maintain its value against the benchmark asset, the consequences could be devastating for users.
The main risk of reserve-backed stablecoins is that some of them cannot be fully backed by reserves.
This makes reserve transparency essential in determining the reliability of a given stablecoin.
Paxos provided the first detailed report documenting the collapse of its BUSD reserves, with a market value of more than $17.6 billion, at the end of the second quarter of 2022.
Approximately $10.6 billion is held in US Treasury securities and approximately $6.3 billion has been placed in US Treasury reverse repo agreements, with the remaining $738 million set aside for various cash-related deposits.
In total, only 4.1% of the US dollar is currently secured in cash.
Binance says Paxos will provide an updated total reserve on a monthly basis.
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