What is BUSD (Binance USD)?

BUSD (Binance USD) is a stablecoin backed by U.S. dollars and issued by Binance, one of the largest cryptocurrency exchanges in the world. A stablecoin is a cryptocurrency designed to have a stable valuation relative to a fiat currency, in this case, the U.S. dollar.

BUSD is used to facilitate the transfer of value on the blockchain, enabling users to exchange and transfer value between different exchanges and cryptocurrency wallets without dealing with cryptocurrency market volatility. BUSD can also be used for online and in-store payments at establishments that accept cryptocurrencies as a form of payment.

BUSD functions like any other stablecoin backed by a fiat currency. In the case of BUSD, each token is backed by one U.S. dollar held in a bank account. This means that for every BUSD issued, there is a corresponding U.S. dollar held in reserve.

When a user wants to acquire BUSD, they can purchase them on an exchange that offers them or convert other cryptocurrencies into BUSD. Once they have BUSD in their wallet, they can use them for online payments or transfers.

When a transaction is made with BUSD, it is recorded on the blockchain, allowing for greater transparency and traceability. Additionally, users can verify the amount of BUSD in circulation and the corresponding reserves in the bank account.

If a user wishes to withdraw their BUSD, they can do so through an exchange that offers them. The exchange will redeem the BUSD tokens for the corresponding U.S. dollars in the bank account and transfer them to the user. This ensures that each BUSD always maintains a value of one U.S. dollar.

What is BUSD (Binance USD)?