Introduction to BUSD Monthly Reserves Report

Introduction to BUSD Monthly Reserves Report

BUSD is fully backed by cash and cash equivalents. Binance works with Paxos to keep token holders fully informed about how their tokens work. Binance is excited to launch the BUSD monthly reserve report to make the operation of the token more open and transparent.

What is BUSD?

BUSD is a stablecoin pegged to the U.S. dollar (USD). The token is issued by Paxos and branded by Binance. BUSD has been approved by the New York State Department of Financial Services (NYDFS), and investors can purchase and redeem the currency at a 1:1 conversion ratio.

What is the importance of reserves?

Stablecoins are digital units of value that rely on stability tools and financial reserves to maintain their value relative to other currencies or commodities. Not all stablecoins are safe and secure, and there are certain risks involved. If a stablecoin fails to maintain its value relative to a reference asset, users can be devastated. For reserve-backed stablecoins, the main risk is that some coins have insufficient reserves. Therefore, the transparency of reserves is crucial to judging the reliability of stablecoins.

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Introduction to BUSD Monthly Reserves Report

Binance has teamed up with Paxos to provide customers with the most trusted and fully regulated stablecoin, BUSD. The coin is backed by reserves and follows the highest standards of security and transparency.

Let’s talk about why BUSD is the safest of the regulated stablecoins on the market.

The issuer of BUSD is Paxos Trust Company. Both the coin and the company are fully regulated by the New York State Department of Financial Services (NYDFS).

BUSD is fully backed by cash and cash equivalents. As it is regulated by major prudential regulators, BUSD is and will be backed only by cash and cash equivalents. BUSD’s cash equivalents reserve consists of: (1) U.S. Treasury bills with maturities up to 90 days; (2) overnight loans guaranteed only by U.S. Treasury securities.

Reserves backing BUSD are kept in accounts that are segregated from the company’s funds and away from the risk of bankruptcy. The chances of Paxos Trust going bankrupt are slim. And under the New York Banking Act, if the company goes bankrupt, it won’t go through the standard bankruptcy process that other companies do. The head of the New York State Department of Financial Services (NYDFS) will return assets held in the custody of the Paxos Trust to their rightful owners. As a qualified custodian, Paxos Trust Company will keep all client assets separate from all company funds.

Building on this foundation, Paxos seeks to go a step further, increase public trust in BUSD, and lead the market in transparency. Click here to view the monthly reserve report. All instruments that support BUSD are listed in the report.

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