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The primary risk of stablecoins is that many of them aren’t fully backed by the reserve currencies. BUSD is always backed 100% by cash reserves without any leverage. And the reserve is made by cash and cash equivalents. While BUSD is fully collateralized, its issuer-Paxos provides a transparent process for minting and burning BUSD tokens. In addition, BUSD reserves are regularly attested by a trusted auditor to ensure users will be able to access the collateral that backs BUSD whenever needed. You can visit our website to check out these reports.

Furthermore, BUSD commits to high standards, including working with regulators to maintain a license and be fully regulated. BUSD is issued by Paxos, a partner of Binance. Both Paxos, as the issuer, and the BUSD stablecoin, are regulated by the New York State Department of Financial Services (NYDFS), a leading regulator in this area. BUSD is also green-listed by the NYDFS, making it pre-approved for custody and trading by any of the NYDFS’ virtual currency licensees.

Last but not least, BUSD offers users the highest levels of safety, protection, and security. In addition to being regulated by the NYDFS, BUSD is subject to the New York Banking Law. That law states that in the unlikely event that Paxos Trust becomes insolvent, it will not go through the standard bankruptcy procedures like other companies.

Instead, the Superintendent of NYDFS would return assets held in custody by Paxos Trust to their rightful owners. Paxos Trust holds customer assets safely separated from any corporate funds as a qualified custodian. This way, our customers can be sure that their assets will always be available at any time.