Lets put ourselves in a really darkish state of affairs:
1)You’ve BUSD both on CEX or in self custody
2)For no matter motive binance dies
3)BUSD is backed by PAXOS therefore no problemo Imma swap it for USD ezpz… or are you able to?
Properly… sure however solely sure kind of BUSD
So…
BUSD is issued by PAXOS, regulated by NYDFS and holds USD 1:1 in FDIC insured banks or US treasury payments. BUSD can also be one of many few secure cryptocurrencies that present month-to-month audited stories of its reserves.
HOWEVER…
You may redeem your BUSD for USD at any time ONLY IF YOU HOLD ON ETHEREUM!
Key half
“***Binance wraps BUSD and points separate tokens (referred to as Binance-Peg BUSD) on a number of blockchains, together with BNB Sensible Chain, Polygon, and Avalanche. These tokens are unaffiliated with Paxos and never regulated by the NYDFS.”***
https://paxos.com/busd-transparency/
Not saying Binance will or is even more likely to fail however it’s a must to be ready for the worst! Be certain to not maintain BUSD as wrapped token or on some other chain that isn’t Ethereum.
Keep protected 🙂
Why even have centralized risk? Just move everything to BTC and cold storage to sleep like a bear till 2025+
If you ask me which big stablecoin is the safest right now I’d say it’s the paxos BUSD, good advice OP
If you believe Binance goes belly up than you should not hold any BUSD, no matter on which chain.
Usdt and Usdc are also not issued on BSC.
We all dont know what amount of liability binance has! So we dont know what would happen to BUSD user funds.
No stablecoin is truly safe. Binance might be in a better financial position than other exchanges but nothing is too big to fail.
The FTX crash has been an eye opener to this and many other things. I think EEUR is the only stablecoin that’s redeemable on every blockchain it supports. It’s still in its early stages compared to more established stablecoins like BUSD, USDC and USDT.
With the hatred towards binance around it’s good that you point out that busd is issued, backed and has audits. It’s not binance making money out of thin air
It’s not likely that binance will collapse but it is good to know where to hold the busd. Thanks.
thanks for pointing this out
What happens if PAXOS fails?
That’s a good thing to know, thanks OP!
Since the BUSD on other chains is not affiliated with paxos there is no security for it being pegged 1:1 am I getting this right?
PAXO claims they have $21 billion in a trust and Binance claims they have $23 billion worth of BUSD assets. There seems to be a $2 billion hole.
Furthermore,
PAXO listed the face value of their T-bill with long expiration, upto 2039. They aren’t getting that if they need to liquidate on spot rate(with heavy penalty due to fed rate skyrocketing).
If Binance dies, one may suddenly find a tiny bit of disclaimer telling you a very different story of how they interpret BUSD. It’s not a good idea to trust anything so closely related to a centralised exchange like Binance.
If Binance falls, it shouldn’t affect BUSD because it is still backed 1:1. Which means it’s value is still $1. So just swap it for USDC or USDT for safe keeping.
Good post!
> 1)You have BUSD either on CEX or in self custody
> 2)For whatever reason binance dies
3) Your BUSD is in binance
4) Get fucked son
I didn’t know that. Thanks OP