This Binance USD review has revealed that Binance USD also known as BUSD is a digital-fiat currency which was issued as an ERC20 token and which supports BEP-2.
Choose your quick section of our Binance USD review below.
A Quick Overview of our Binance USD Review:
BUSD is part of Binance’s Venus project, which is designed to accelerate development as well as integration of stablecoins in the global economy.
Live Price
What is Binance USD?
Binance USD (BUSD) was launched in 2019 to meld the stability of the US Dollar through blockchain technology. BUSD is a USD-backed stablecoin which is issued by the Binance exchange trading platform. BUSD is approved as well as regulated by the New York State Department of Financial Services (NYDFS).
Key Features and Takeaways of Binance USD
BUSD has the following key features as well as takeaways:
- BUSD is a digital-fiat currency that was issued as an ERC20 token and which supports BEP-2.
- BUSD plays a vital role in transactions, payments, settlement, and Decentralised Finance (DeFi).
- BUSD is pegged against the US Dollar and is regulated and approved by NYDFS in partnership with Paxos.
- Even though BUSD is based on the Ethereum blockchain, it is set to run on a highly scalable blockchain known as the Fincubate (FCB) Financial Blockchain, which makes use of Graphene technology for high throughput, and which can support high-frequency financial applications.
- Behind each BUSD, there is a US Dollar in capital reserve. Thus, 100% of BUSD which is in circulation has a corresponding USD asset in the custody of third-party financial trusts.
- BUSD is part of Binance’s Venus project, which is designed to accelerate development as well as integration of stablecoins in the global economy.
- Binance, in cooperation with other multinational financial corporations, enables its users to invest in credit cards and other cryptocurrencies through its platform as BUSD can only be purchased by credit card.
Binance USD Mining
BUSD, even though it is based on the Ethereum blockchain, cannot be mined. Binance USD was created to be fully collateralized with the USD dollar which is held in US bank accounts at a ratio of 1:1.
These accounts were created and administered by Paxos and they are also audited monthly as according to New York state regulations. Requests to either buy or sell BUSD are therefore accompanied by a movement of cash in, or out, of the reserve account.
According to these requests, BUSD tokens can either be minted or burned accordingly. As the BUSD is pegged to the value of USD, requesting to purchase $1 000 worth of BUSD, or 14 242 ZAR at the time of writing, will result in the minting of 1 000 BUSD tokens.
This will subsequently increase $1 000 in the abovementioned reserve accounts. On the opposite end of this redemption of 1 000 BUSD, it will cause the burning of these tokens and a subsequent decrease of $1 000 in the reserve. This is as a result of the US dollars that are removed and transferred to the user who redeemed the tokens.
If there is a significant security threat, for instance, a hack attempt, Paxos can pause the transfer, creation, or destruction of BUSD tokens. BUSD is an ERC20 asset that is simple to trade as transferring and viewing of transactions has the support of most wallets and exchanges that allow Ethereum.
BUSD is monitored and regulated by the NYDFS in compliance with the Trust Charter. Through this, Paxos is obligated to follow all applicable New York banking laws and it ensures that Paxos can freeze accounts and wipe account balances when required.
This specific regulation is adhered to through a “setLawEnforcementRole” function which can be used to place administrative restrictions on the circulating supply of BUSD.
Pros and Cons
| ✔️ Pros | ❌ Cons |
|---|---|
| BUSD is backed by the USD and uses it as collateral | Not suited for trading as BUSD is a stablecoin |
| BUSD will not have to face black swan events, liquidity crunches, or any other extreme market risks | BUSD is only available on Binance and Paxos |
| BUSD has a “Gilt-Edged Bond” level of credit | |
| BUSD is the only cryptocurrency which accepts supervision from financial regulatory entities | |
| BUSD is the only crypto which is verified by financial institutions and which is audited by international accounting firms | |
| BUSD integrates several resources from merchants, exchanges, and digital wallets | |
| When ran on the FCB Financial Blockchain, BUSD is set to have efficient, quick, safe, and reliable services | |
| BUSD issuance and redemption is immune to liquidity and pricing restrictions | |
| BUSD complies with anti-money laundering (AML) and counter-terrorist financing laws | |
| Minting and burning of BUSD is based on smart contracts, offering transparency | |
Transaction Fees
| 💰 Type of Fee | ℹ️ Information |
|---|---|
| Maker/Taker Fee | 0.0750% - 0.0150% |
| Maker/Taker and referral fee | 0.0600% - 0.0120% |
Should you buy Binance USD?
BUSD has become an increasingly popular avenue for investment since its launch. Apart from the strict regulation and guarantee of security, there are numerous advantages of BUSD, but it should be noted that this is not a cryptocurrency that can be traded, bought, or sold with the intention of making a profit.
BUSD was created simply to improve the decentralized financial ecosystem by using a global network that is frictionless and allows for digital assets to improve accessibility, flexibility, and speed to various transactions. Plainly put, BUSD offers users the ability to transact with other digital and blockchain-based assets while simultaneously minimizing volatility risks.
BUSD can be traded with 48 other currency pairs at a 1:1 ratio with the US dollar. In addition, BUSD also has low transaction fees which make it an excellent alternative for any currency. BUSD is also not limited to real-world assets and it can be exchanged for other popular stablecoins at a 1:1 basis with fewer fees.
BUSD also allows for users to earn money either actively or passively, with many holding BUSD in their wallets and hedging their bets against the volatility of accumulated digital assets. Alternatively, others actively trade their BUSD on either Paxos or Binance.
How to buy Binance USD (BUSD)
Step 1 – Register an account with Gate.io
Navigate to the official Gate.io website and select the option to “Sign Up” from the homepage.
Complete the online registration form by providing country/region, a selected username, email address, and user-selected password. Read and accept the User Agreement and Privacy and select “Next”.
Create a fund password and select “Create Account”. Complete the “I am not a robot” reCAPTCHA. Check your email inbox for the activation email and click on the link in the email. If the link does not work, you can copy and paste the URL into your browser.
Log into your account using your credentials and complete the reCAPTCHA.
Check your email again for the verification email that contains the 6-digit code and click on “Confirm”. Enter the code that you received into the blocks provided and select “Log In” to proceed.
Before you can use the platform to purchase Binance USD/BUSD and other cryptocurrencies on Gate.io, you must complete the “Know Your Client” or KYC procedure to verify your identity and your proof of residence.
Click on “KYC Now” at the bottom of the webpage to start the process.
Select whether you are an individual or an organization by selecting “Verify Now” under the relevant option.
Select your country from the dropdown list, enter your full name followed by confirmation thereof. Select your ID document type and provide your ID Number as shown on your official ID Document.
Click on the first image to upload a clear photo of the front of your ID document followed by a clear photo of the back of the document.
Next, write your Gate.io unique ID on a piece of paper and take a photo of yourself holding up your identity document (front) and the paper containing your unique ID.
Once you have done this, click on “Confirm and Submit”.
Next, you must enable the Timed One-Time Password (TOTP) to be able to log into your account. This can be done by clicking on “Set Now” at the bottom of the page.
On the new page that loads, select “Click here” to set up Two-factor Authentication.
Download Google Authenticator onto your mobile device by making use of any of the above-mentioned methods.
Follow the steps indicated to add your Gate.io account by scanning the QR code or entering your unique key.
Enter the TOTP, your fund password, and the code sent to your email address and select “Enable Two-factor Authentication”. With this setup, you must use the Google Authenticator app to sign into your account every time.
Step 2 – Deposit funds
You must note that Gate.io is only a crypto-to-crypto exchange which means there is no fiat gateway. The only way through which funds can be added is to transfer existing crypto into your Gate.io wallet.
BUSD can only be bought through Tether/USDT or Ethereum/ETH.
Navigate to the deposit/withdrawal section by hovering over your account and selecting the relevant option. Choose from the list of coins in which you can make a deposit and select “deposit” next to the appropriate coin.
You will be redirected to a page that generates a deposit address for the coin that you wish to deposit.
Copy this address, or scan the QR code, into the wallet where you are making a withdrawal from and depositing to Gate.io and wait for the relevant blockchain to confirm your transaction. Once the transaction has been completed and verified by the nodes on the chain, the coins will be sent to the Gate.io wallet and you can start trading BUSD.
Step 3 – Explore your trading options
Gate.io offers a variety of ways through which cryptocurrencies can be obtained. Each of these can be explored individually depending on your trading needs and objectives.
To start trading BUSD, select the option from the “Trade” Menu. Enter “BUSD” into the search bar to see which trading options are available.
For spot trading, for instance and as an example, select BUSD_USDT. Once you have selected, you will be directed to the exchange page which corresponds to the cryptocurrency pair BUSD/USDT.
Here, you will see that you have the option to buy or sell BUSD either as a limit order, grid trading, or as a time condition. The most common trading method is that of limit trading and thus it will be used for this guide.
Step 3 – Buy BUSD via Limit Order
To buy BUSD and create a limit order for it, you can enter the amount of BUSD you want to purchase, and the price you want to buy it at in USDT. This tool will tell you what the overall cost is in USDT, or any other chosen counter-currency, which will be deducted from your wallet once the order has been executed.
Step 4 – Sell BUSD through via Limit Order
To sell BUSD, find the panel under the chart and create a limit order for USDT according to your own preferences. Note that with a peg to USD, BUSD that you exchange for USDT will hold the flat value that it has despite market conditions in the cryptocurrency market.
Step 5 – Withdraw funds
To withdraw funds, you will use the same page in Gate.io which was used to make a deposit.
Click on the deposit/withdrawal option on your Account dropdown and find the wallet of the currency that you wish to withdraw. You can do this easily by using the search bar provided.
Instead of a deposit address being generated, you will do this on the exchange, or the wallet being used as the destination for withdrawal of funds from Gate.io. Paste the address of the receiving wallet in the field provided and provide your Gate.io fund password, email code, and TOTP before selecting “Submit Request”.
Frequently Asked Questions
When was Binance USD first launched?
BUSD was launched in September 2019.
Who founded Binance USD?
BUSD is the brainchild of both Binance and Paxos as result of their partnership.
What is “ICO”?
It is Initial Coin Offering that, unlike an IPO, does not mean that those who invest in the cryptocurrency will have an ownership stake of the company that they provide funds to.
When was Binance USD’s ICO and how much did it raise?
BUSD did not have an ICO.
Is Binance USD legit?
Yes, Binance USD is legit. It is backed by the US Dollar and it is approved and regulated by the NYDFS.
What is Binance USD’s total supply?
The total supply of BUSD is 1,151,865,392.
What is the purpose of Binance USD?
To improve the decentralised financial ecosystem by using a frictionless global network, allowing digital assets to add accessibility as well as flexibility and speed to transactions.
On which blockchain is Binance USD based?
As a ERC20 token, Binance USD is based on the Ethereum blockchain.
Does Binance USD work with smart contracts?
Yes, there are existing ERC20 smart contracts that work alongside BUSD tokens. They help to offer security for the process and remove the need for third parties, moving transactions to the trusted capabilities of the blockchain.
Does Binance USD have the potential to become more valuable?
BUSD is pegged to the US Dollar and the value of BUSD is in a 1:1 ratio with the dollar. As the dollar increases, so will BUSD.
Top 4 Brokers
