Crypto exchange Binance is launching a dollar-backed stablecoin in the U.S.
Moreover, the new Binance USD (BUSD) has received the blessing of the New York Department of Financial Services (NYDFS). The exchange announced Thursday that NYDFS had approved the new offering, which Binance is launching in partnership with the Paxos Trust Company.
The Binance stablecoin will be backed by U.S. dollars on a 1:1 ratio, according to a press release. The offering joins the Paxos Standard and the Gemini Dollar as an NYDFS-approved stablecoin.
At launch, verified Paxos customers will be able to directly purchase BUSD tokens through the company's wallet using either U.S. dollars or PAX, its own stablecoin. Binance users will likewise be able to trade BUSD for bitcoin, binance coin or XRP.
The exchange previously announced its intention to issue stablecoins worldwide as part of its Venus project. Binance has already issued stablecoins pegged to bitcoin (BTCB) and the British pound (BGBP).
In a statement, Binance CEO Changpeng Zhao ("CZ") said:
Not the first
According to the company, Paxos will act as both the custodian and the issuer for BUSD, and will regularly audit the dollar holdings.
Paxos co-founder Rich Teo said in a statement that BUSD would be "a vital step towards long term stability in global crypto markets." He added that Paxos' "stablecoin as a service" offering allowed Binance to customize the new product for its users.
"Paxos is leading the digital trusts space and we are excited to work with them in developing our native stablecoin," CZ said.
Changpeng Zhao via CoinDesk archives
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.