Binance is the world’s biggest crypto exchange, and it made a massive announcement yesterday. The world of cryptocurrencies has come a long way since the days when there used to be a handful of tokens and investors generally switched from one token to another. However, over the past few years, a wide range of tokens have come into existence, and perhaps the most interesting ones have been the stablecoins.
These coins are backed by the United States dollar and are hence far more stable than traditional crypto tokens. Plenty of organizations have come up with their own stablecoins over the past few years, and now, Binance has decided to join them as well.
The name of the stablecoin in question is Binance USD, and it is going to be backed by the United States dollar at a ratio of 1:1. The announcement was made by the company on Thursday, and it is a significant development considering the fact that Binance remains one of the most popular exchanges worldwide. The token will be known as the BUSD, and the company stated that the token is going to be mined on the Ethereum blockchain. That being said, the company did not rule out the possibility of migration to the Binance Chain at some point in the future.
However, it is important to note that the whole thing is not being built by Binance alone. The crypto exchange has collaborated with Paxos, the stablecoin issuer, for this project. More importantly, Paxos will also serve as the keeper of the fiat reserves that are essential for running any stablecoin project. The Chief Executive Officer of Binance, Changpend Zhao, stated that Paxos is one of the leading service providers in this particular space, and the company is pleased to work with Paxos on this project. Later on, in September, customers will be able to buy the stablecoin directly from Paxos and start trading on Binance.
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