BUSD
Crypto Overview
Overview
BUSD was a USD-pegged stablecoin that was issued by Paxos and branded by Binance. The token was launched in 2019 as a regulated stablecoin backed 1:1 by US Dollar reserves held in FDIC-insured US banks.
Intended Utility
The primary purpose of BUSD was to serve as a stable medium of exchange and store of value in the crypto ecosystem, particularly on Binance's platforms. It aimed to provide a regulated and stable cryptocurrency that could be used for trading, payments, and as a safe haven during market volatility.
Current Status
As of February 2023, following regulatory pressure from the SEC, Paxos announced it would stop minting new BUSD tokens. Binance has since announced plans to gradually phase out BUSD support. While existing BUSD tokens remain fully backed and redeemable 1:1 for USD through Paxos until at least February 2024, the token is being deprecated.
Business Model Analysis
The business model was straightforward and transparent: Paxos held USD reserves equal to the total BUSD supply and earned revenue from licensing the stablecoin technology to Binance. All reserves were regularly audited and held in regulated US banks.
Token Distribution and Governance
As a stablecoin, BUSD was minted and burned based on market demand, with no pre-mine or founder allocation. The token supply was entirely controlled by user deposits and withdrawals through Paxos.
Crypto Impact
To assign a comfort level investing in BUSD from a halal perspective we need to determine whether it has a net positive or negative impact.
Towards this end, the table below is used to tally all the positive and negative considerations our members can think of related to BUSD.
If you don’t see something that should be listed, positive or negative, feel free to submit your own contribution using the button “Contribute”.
We will review your contribution for accuracy before publication.
Importantly, you can review listed contributions and vote on which one you think has the greatest impact, positive or negative.
You only have one vote per asset so use it wisely.
You can change your vote if you change your mind.