The world’s largest cryptocurrency market shares data on the money behind its stablecoin pegged to the US dollar.
In a new announcement, Binance says it will provide regular updates on the reserves behind the popular Binance USD (BUSD).
The move comes after several digital assets and their affiliate projects collapsed this year causing losses of tens of billions of dollars worldwide.
Binance claims that, unlike other so-called stablecoins, BUSD is not only “100% guaranteed in cash and cash equivalents,” but is also regulated and approved by the US Department of Financial Services, New York State (NYDFS). .
BUSD was launched in 2019 by Binance and Paxos and is currently the sixth largest crypto asset with a market capitalization of over $ 17.8 billion.
According to the announcement,
“If a stablecoin fails to hold its value against the asset benchmark, the consequences could be devastating for users.
The main risk of reserve backed stablecoins is that some stablecoins may not be fully backed up by the reserve.
This makes reserve transparency crucial in determining the reliability of a given stablecoin.
Paxos has provided the first detailed report documenting the breakdown of its reserves in BUSD, with a market value of more than $ 17.6 billion at the end of the second quarter of 2022.
Nearly $ 10.6 billion is held in US Treasuries and nearly $ 6.3 billion is placed in US Treasury reverse repurchase agreements, with the remaining $ 738 million allotted to various related cash deposits.
In total, only 4.1% of BUSD is currently backed by cash.
Binance says Paxos will provide updated reserve totals on a monthly basis.
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