Binance USD (BUSD)

Payments and Transactions

Binance USD is a stablecoin pegged 1:1 to the US dollar, used for digital payments on blockchains. It allows users to send and receive digital dollars quickly and securely worldwide. It is accepted by various merchants and can be used for real-world payments, such as booking hotel rooms via QR codes.

Trading and Liquidity

It is widely used on cryptocurrency exchanges, including Binance, for trading against many crypto pairs. Binance USD provides liquidity on decentralized finance (DeFi) platforms and centralized exchanges, making it easier to trade and swap cryptocurrencies without price volatility.

Yield Farming and Staking

Users can stake Binance USD to earn token rewards and participate in yield farming on popular DeFi protocols like Venus, Aave, and yearn.finance, allowing them to earn interest or rewards on their holdings.

Cross-Chain Compatibility

Binance USD operates on multiple blockchains such as Ethereum (ERC-20), Binance Smart Chain (BEP-20), Avalanche, Polygon, Tron, and Optimism, making it versatile for use across different blockchain networks.

Stable Value and Regulatory Compliance

Backed by US dollar reserves and regulated by the New York State Department of Financial Services, Binance USD offers price stability and trust, making it a reliable option for users seeking a stable digital currency.

Advantages of Binance USD

• Stability: Binance USD is a stablecoin pegged 1:1 to the U.S. dollar, backed by equivalent USD reserves, which helps keep its value stable.
• Usability: It is widely used for trading and transactions within the crypto ecosystem, allowing easy movement of funds without converting back to fiat currency.
• Built on Ethereum: Being on the Ethereum blockchain offers decentralization, transparency, and user control over funds.
• Popularity: It is a popular choice among traders and investors for its reliability and liquidity.

Disadvantages of Binance USD

• Centralization: Issued and controlled by Binance, it is centralized, meaning Binance manages issuance and operations.
• Regulatory Risks: It faces potential regulatory scrutiny as stablecoins are increasingly monitored by authorities worldwide.
• Market Risks: Its value could decline if market demand drops or due to other market volatility factors.
• Legal and Operational Risks: Changes in regulations or legal challenges could affect its value and usability.

In summary, Binance USD offers stability and ease of use in crypto trading but comes with centralization and regulatory considerations.

Founders of Binance USD

• Changpeng Zhao (CZ): He is the main founder of Binance and also the founder of Binance USD. CZ is a well-known businessman in the crypto world and has been involved in several crypto companies. He co-founded Binance in 2017 and led it as CEO until 2023.

• Yi He: She co-founded Binance alongside Changpeng Zhao. Yi He has a background in technology and marketing and was a key part of Binance's early growth. She has also served as co-CEO of Binance.

Binance USD is a stablecoin issued by Paxos on behalf of Binance, but the founders of the Binance platform itself, which supports Binance USD, are Changpeng Zhao and Yi He.

Investors in Binance USD

Binance USD is a stablecoin issued by Paxos and supported by Binance. It is backed by U.S. dollar reserves held in insured U.S. banks and regulated by the New York State Department of Financial Services. Specific individual or institutional investors in Binance USD itself are not publicly detailed.

Investors in Binance.US

Binance.US, the U.S.-based crypto exchange related to Binance USD, has raised over $200 million in funding from 13 institutional investors. Key investors include Fundamental Labs (lead investor), Foundation Capital, RRE Ventures, Original Capital, VanEck, Circle Ventures, Beacon Venture Capital, Bossa Invest, Calm Ventures, and Flucas Ventures among others. These investors participated in a seed funding round completed in April 2022.

Halal Status of Binance USD

• Yes, Binance USD is considered halal because it is a stablecoin fully backed by USD reserves held in regulated US banks, with transparent and straightforward business practices. It is minted and burned based on market demand without any interest (riba) or uncertainty (gharar) involved.
• The token supply is controlled by user deposits and withdrawals, and it does not involve interest-based lending or speculative activities that are prohibited in Islamic finance.