BUSD Stabilizes to $1 After Binance CEO Clarifies Connection to Paxos

Binance USD (BUSD) Stabilizes at $1

  • Binance USD (BUSD) has stabilized at its intended $1 peg after Binance CEO Changpeng Zhao clarified the connection to the Paxos Trust Co.-issued token.
  • Paxos has already burned over $700 million of BUSD tokens since Monday.
  • Despite ongoing regulatory uncertainty, Binance will continue to support BUSD for the foreseeable future.

Connection to Paxos-Issued Token Clarified by CEO

On Tuesday, Binance CEO Changpeng Zhao commented on the crypto exchange’s connection to the popular Paxos Trust Co.-issued token. He clarified that Binance does not issue BUSD and that an agreement exists between them allowing Paxos to use their brand. This likely improved sentiment among traders and improved the coin’s stabilization at its intended $1 peg.

Token Burning

Since Monday, when the New York Department of Financial Services (NYDFS) ordered Paxos to stop minting more of the tokens, Paxos has already burned more than $700 million of BUSD tokens. It is expected that their market cap will decrease over time as a result.

SAFU Funds Assured

Zhao assured users that funds are SAFU and fully covered by reserves in their banks with reserves already audited many times by various audit firms. Despite this continued assurance, some users may still migrate from using BUSD due to regulatory pressure in certain markets.

Continued Support From Binance

Despite these potential issues, Zhao confirmed that Binance will continue to support BUSD for the foreseeable future and make product adjustments accordingly if necessary. They will also be reviewing other projects in affected jurisdictions to ensure customers are insulated from harm.

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