Binance spoke about the reserves supporting the BUSD stablecoin
The largest cryptocurrency exchange Binance spoke about the reserves supporting its own BUSD stablecoin and promised to regularly provide updated data on them
This step was taken after the collapse of several digital assets and related projects, which caused losses of tens of billions of dollars. Binance stated that, unlike other stablecoins, BUSD is not only 100% backed by cash and cash equivalents, but is also regulated by the New York State Department of Financial Services (NYDFS).
BUSD was launched in 2019 by the joint efforts of Binance and Paxos. Now the capitalization of the stablecoin is about $ 18 billion.
"If a stablecoin fails to maintain its value relative to a benchmark asset, the consequences for users can be depressing. The main risk of stablecoins backed by reserves is that some of them are not fully backed by them. Transparency of reserves is fundamental for determining the reliability of a stablecoin," Binance noted
Paxos has submitted a detailed report on BUSD reserves at the end of the second quarter of 2022. Almost $10.6 billion is held in US Treasury bonds, about $6.3 billion is in US Treasury repurchase agreements, and the remaining $738 million is distributed among various deposits.
Thus, currently only 4.1% of BUSD is secured in cash. Binance noted that Paxos will provide monthly updates on reserves.
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