Cryptocurrency exchange Binance said that data indicating that the stablecoin is not fully supported from time to time is due to a timing mismatch.
Cryptocurrency Exchange Binance Opposes Report That Stablecoin Is Not Fully Supported
Leading crypto exchange Binance has countered a report by Bloomberg that the Binance-Peg BUSD stablecoin doesn’t always seem to have been backed by BUSD.
The news source reported that BUSD was often under-collateralized between 2020 and 2021, with the gap sometimes exceeding $1 billion, based on analysis by ChainArgo co-founder Jonathan Reiter.
According to the exchange, however, the Binance USD (BUSD) stablecoin is “fully backed by USD cash and cash-equivalent reserves,” and Binance-Peg BUSD is fully backed by BUSD.
“Despite the differences in data, users were not affected by usage at any point,” Binance said.
“BUSD also has no impact on the ERC-20 issued by Paxos, which is regulated by NYDFS, audited monthly and backed by USD cash and cash equivalent reserves,” the statement said.
Regulators and media outlets seem to have turned their attention to stablecoins after the collapse of Terraform Labs and the TerraUSD token.
The crypto platform was one of the first in a series of bankruptcies and failures in 2022 that included Voyager Digital, Celsius Network, BlockFi, and FTX, affecting thousands, if not millions, of users in the crypto space.
*Not investment advice.
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