The world of cryptocurrencies continues to grow and evolve. In 2019, it is nearly impossible to picture a time where stablecoins were not an integral part of this industry. Binance and Paxos are now doubling down on those efforts by launching BUSD. Another stablecoin backed by the US Dollar, but can it be successful?
What is BUSD Again?
It has been rumored for a while now how Binance is allegedly working on new stablecoins. Although the initial effort revolves around a GBP-backed currency, it seems the company is exploring other options as well. Earlier today, Binance confirmed it has teamed up with Paxos. Both companies will issue BUSD, a new USD-backed stablecoin.
What is rather interesting is how this venture may prove to be rather successful. Binance is the biggest cryptocurrency exchange in the world today. Paxos, or Paxos Trust Company, is a regulated financial institution. Its business model revolves around digitizing and mobilizing assets of any kind. By creating a virtual dollar, the company is living up to those expectations. Gaining traction in this fledgling industry is not guaranteed, however.
Contrary to the ever-popular Tether USDT, BUSD is effectively approved by the New York State Department of Financial Services. Whereas the crypt industry and the NYDFS don’t always see eye-to-eye, this development can prove to be rather interesting. It is good to see the companies seek official approval. It is even more impressive to see them receive it without much resistance.
Despite this approval, the new project will face a lot of roadblocks along the way. Stablecoins, while designed to keep a steady value, are often volatile in nature when paired with cryptocurrencies. That said, they are also going up against some of the industry’s bigger players, including USDT, TUSD, USDC, and so forth. There are more stablecoins than anyone asked for, and BUSD is simply added to the bottom of that list, for now.
Where can it be Used?
Although BUSD is a joint venture between Paxos and Binance, it will be interesting to see where the stablecoin will end up in the end. Paxos will begin trading this stablecoin later this month. Binance will allow it to be traded against Bitcoin, Binance Coin, and XRP. When that will happen, remains to be seen. It is believed this will occur in September of 2019 as well, albeit that has not been officially confirmed.
As is usually the case, a stablecoin can be traded on any exchange, in theory. As Paxos is the USD custodian and issuer of BUSD, this new currency isn’t limited to just these two trading platforms. Binance CEO Changpeng Zhao also aims to unlock ädditional financial services through the issuance of BUSD”. A very ambitious, albeit rather vague statement.