BUSD

BUSD (Binance USD) was a regulated stablecoin pegged 1:1 to the US Dollar, issued by Paxos Trust Company in partnership with Binance and approved by the New York Department of Financial Services (NYDFS).

Current Status

As of February 2024, Paxos stopped minting new BUSD tokens following regulatory action from the NYDFS and SEC. The stablecoin is being phased out, with existing tokens still redeemable for USD through Paxos until February 2025.

How It Worked

BUSD was backed by USD deposits and U.S. Treasury securities held in FDIC-insured banks and audited monthly. Each token represented one US dollar in reserves.

Key Features

• Regulatory Approval: Was approved and regulated by NYDFS
• Monthly Audits: Reserves were attested monthly by independent third parties
• Multi-Chain: Available on Ethereum (ERC-20) and BNB Chain (BEP-20)

Historical Significance

BUSD was one of the first regulated stablecoins and demonstrated the challenges of operating fully-compliant stablecoins in the U.S. regulatory environment. Its discontinuation highlights the evolving regulatory landscape for digital assets.