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The world’s largest cryptocurrency market shares data about the money behind its own USD-pegged stablecoin.
In the new announcement, Binance To tell Provides regular updates on the reserves behind the popular Binance USD (BUSD).
The move comes after several digital assets and related projects collapsed this year, causing tens of billions of dollars in losses worldwide.
According to Binance, unlike other so-called stablecoins, BUSD is not only 100% backed by cash and cash equivalents, but is also regulated and approved by the New York State Department of Financial Services (NYDFS).
BUSD was launched by Binance and Paxos in 2019 and is currently the 6th largest crypto asset with a market cap of over $17.8 billion.
According to the announcement,
If a stablecoin fails to maintain its value relative to its reference asset, the consequences can be devastating for users.
The main risk with reserve-backed stablecoins is that some are not fully reserve-backed.
This makes reserve transparency fundamental in determining the credibility of a particular stablecoin.
Paxos provided initial details report Market value at the end of Q2 2022 surpassed $17.6 billion, recording a breakdown of the BUSD reserve.
About $10.6 billion is held in U.S. Treasury bills, about $6.3 billion is reserved in U.S. Treasury reverse repurchase agreements, and the remaining $738 million has been allocated to various cash-related deposits. .
Overall, only 4.1% of BUSD is currently cash-backed.
According to Binance, Paxos will provide a monthly updated reserve total.
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