As was reported earlier, Binance has decided to remove competing stablecoins on its exchange and replace them with its homegrown version BUSD. In a corporate statement, Binance said it would “auto convert” holdings in dollar-based stablecoins with BUSD later this month.
Paxos, a regulated “blockchain infrastructure” that also powers its own dollar-based stablecoin, issued a statement calling the decision by Binance a win for investors.
Rich Teo, Co-Founder and CEO of Paxos Asia, stated:
“This is a positive development for the safety of Binance’s customers. Unlike competing stablecoins, BUSD is regulated by NYDFS which sets rules and monitors compliance with those rules. ONLY regulated stablecoins do this, setting us apart from stablecoins issued by companies operating with Money Transmitter Licenses (MTLs) that have no oversight of reserves or governance. Furthermore, BUSD reserves are held by a bankruptcy-remote trust which offers greater consumer protections, setting it apart from MTL-issued stablecoins which are held by corporations and exposed to losses and bankruptcy.”
While Paxos offers its own bespoke dollar-based stablecoin, USDP – which was removed from Binance, it also powers Binance’s stablecoin. So, BUSD is a white-label stablecoin that Paxos has developed in partnership with Binance.
Paxos is regulated by the New York State Department of Financial Services and its stablecoin is issued by Paxos Trust Company. Paxos offers monthly attestations regarding the status of assets backing both USDP and BUSD.