Crypto exchange Binance reveals reserves that support Stablecoin BUSD in driving transparency

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.

Advertising

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.

Never miss a thing – sign up to receive encrypted email alerts straight to your inbox

Check price action

Follow us TwitterFacebook and Telegram

Browse the Daily Hoodle Mix

Check out the latest news headlines

& nbsp

Disclaimer: The opinions expressed in The Daily Hodl are not investment advice. Investors should perform their due diligence before making high-risk investments in bitcoin, cryptocurrency, or digital assets. Please note that your transfers and transactions are at your own risk and any loss you may incur is your responsibility. The Daily Hodl does not recommend buying or selling cryptocurrencies or digital assets, and The Daily Hodl is not an investment advisor. Please note that The Daily Hodl is involved in affiliate marketing.

Featured Image: Shutterstock/eliahinsomnia

Leave a Comment