Binance USD (BUSD) Price Stabilizes at $1

• Binance USD (BUSD), the third-largest stablecoin by market cap, is returning to its intended $1 peg after Binance CEO Changpeng Zhao clarified the connection to the Paxos Trust Co.-issued token.
• Paxos has already burned over $700 million of BUSD tokens since Monday.
• During a Twitter Spaces session on Tuesday, Zhao clarified that Binance does not issue BUSD and assured users that funds are #SAFU with their reserves already audited many times by various audit firms.

Connection Between BUSD and Paxos

BUSD is a stablecoin backed by short-term treasuries and cash-like assets. It rallied to $0.9997 in European morning hours on Wednesday, recovering from a two-year low of $0.9950 hit after the New York Department of Financial Services (NYDFS) on Monday ordered Paxos to stop minting more of the tokens. During a Twitter Spaces session on Tuesday, Zhao clarified that Binance does not issue BUSD but rather have an agreement to let them [Paxos] use their brand. He also added that Paxos will continue to service the product, and manage redemptions while assuring users that funds are #SAFU and fully covered by reserves in their banks with their reserves already audited many times by various audit firms.

Impact Of Regulatory Pressure On Market Cap

The regulatory pressure could impact BUSD’s market cap which will decrease over time if it is ruled as a security by courts as this will significantly impact the development of the crypto industry in jurisdictions where it is ruled as such. However, despite ongoing uncertainty in certain markets, Zhao said that Binance will continue to support for now but foresees users migrating to other stablecoins over time and product adjustments being made accordingly.

Safety Of Funds Guaranteed By Audits

Paxos has reassured users that funds are #SAFU with their reserves already audited multiple times by various audit firms. To ensure user safety in jurisdictions where there may be regulatory issues surrounding BUSD being ruled as a security, Zhao said they would be reviewing other projects to ensure users are insulated from undue harm.

Future Of The Stablecoin

As of now, BUSD is still traded across exchanges around the world despite ongoing regulatory uncertainty in certain markets and traders appear confident about its future as prices have stabilized around its intended peg of $1 again following clarification from Changpeng Zhao regarding its connection with Paxos Trust Co.-issued token .