Binance USD (BUSD) is a stable coin pegged to USD that has received approval from the New York State Department of Financial Services (NYDFS). BUSD will be available for direct purchase and redemption at a rate of 1 BUSD = 1 USD.
Binance USD (BUSD) is a stablecoin — a cryptocurrency designed to hold a steady value of one US dollar per token. It was created jointly by Binance and Paxos, with Paxos as the issuer holding US dollar reserves to back every token in circulation. Unlike Bitcoin or Ethereum, its purpose isn't price growth but providing a stable digital asset for trading and transfers.
BUSD is a fiat-backed stablecoin, meaning each token is backed by US dollars held in reserve by its issuer, Paxos. While most cryptocurrencies fluctuate wildly in price, BUSD is designed to stay pegged at $1. That makes it useful as a 'parking spot' for funds between trades rather than a speculative asset.
BUSD was issued as a token on the Ethereum blockchain under the ERC-20 standard, with versions also available on other networks like BNB Chain through pegged variants. Paxos, a regulated trust company, managed the issuance and redemption of tokens and held the dollar reserves. Because it's a standard token, it can be sent, received, and stored like any other crypto asset on supported networks.
New BUSD is only minted when someone deposits dollars with Paxos, and tokens are burned when they're redeemed — so the supply always matches the reserves. Paxos published monthly attestations of its reserves and was regulated by the New York State Department of Financial Services. Note that Paxos stopped minting new BUSD in 2023, and the token has been in a wind-down phase since then.
BUSD can be stored in any wallet that supports the blockchain it lives on, such as Ethereum-based wallets like MetaMask or hardware wallets like Ledger. Its main uses were trading pairs on exchanges, moving funds between platforms, and serving as a stable unit of account. Given the wind-down of the token, many users have moved to alternative stablecoins like USDT or USDC.