BUSD is a stablecoin launched in 2019 as part of the collaboration between Binance and Paxos Trust Company. It’s designed to provide users with an easy, secure, and cost-efficient way to access digital assets on both crypto exchanges and traditional financial services platforms.
The asset aims to maintain its value at 1:1 parity with the US Dollar by being fully backed by reserves held in USD. This means that one BUSD token will always be worth $1 USD regardless of market conditions or fluctuations in other currencies. Through this arrangement, it can offer users stability when trading across different cryptocurrencies while avoiding any exposure to capital gains taxes associated with volatility.
In addition, because it’s been issued under strict regulatory oversight from New York State Department Financial Services (NYDFS), all transactions involving BUSD must comply with anti-money laundering laws and counter terrorism financing regulations set out by NYDFS for customer protection purposes. As such, participants involved must go through KYC/AML verification processes before using the coin for transactions on either exchange platform or within traditional banking systems worldwide.
Unlike Bitcoin which is decentralized and relies entirely upon miners for transaction processing power; BUSD has opted instead for centralized control via its issuer – Paxos Trust Company – who retains full authority over issuing new tokens into circulation whenever they are needed as well as redeeming them again if necessary too; ensuring adequate supply meets user demand at all times without compromising liquidity levels along the way either!
