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:
“We hope to unlock more financial services for the greater blockchain ecosystem through the issuance of BUSD, including more use cases and utility through the power of stable digital assets.”
Not the first
Binance USD is only the latest stablecoin whose reserves are being held by Paxos. The company, which was the first crypto firm to receive a trust charter from NYDFS in 2015 (as the itBit Trust Company), now custodies the dollar reserves for its own Paxos Standard stablecoin and Huobi’s HUSD token.
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.