To the first-time crypto investor, a stablecoin’s purpose may not be clear. However, BUSD and other stablecoins are an essential part of the crypto ecosystem. They allow investors and traders to hold a low-volatility asset on the blockchain without the need to exit the crypto space. In short, they play the role of a digital dollar.
Two of the most trusted companies in the crypto space partnered to create Binance USD. Paxos uses blockchain tech to build stablecoins for external companies. They have also developed a gold-backed stablecoin called PAXG, a tokenized version of gold. Owning PAXG is like owning gold, without the need to store or transport it.
The New York State Department of Financial Services regulates both BUSD and PAXG tokens. For reference, Tether is still months away from being audited, despite increased regulatory pressure.
New York state regulators have enforced particular measures on Paxos, Binance, and how the stablecoin must operate. The full supply of BUSD tokens is backed by an equivalent amount of fiat US dollars. Further, Paxos must carefully control how many tokens enter and exit supply.
Why buy BUSD?
BUSD offers key attributes which make it a strong investment, even compared to other stablecoins. First, it is far more accessible. While the token has always been easy to purchase via Paxos or Binance, you can now purchase BUSD tokens via ZebPay, too!
There is also greater flexibility in allowing crypto users to quickly turn their holdings into a stable asset without moving off the blockchain. BUSD exists on three different blockchains: Ethereum, Binance Smart Chain, and Binance Chain. You can always swap your tokens between the chains as needed.