After the provision of the Binance USD (BUSD) stablecoin on Ethereum and BNB Chain, the crypto exchange Binance will make the stablecoin available on the Avalanche and Polygon networks.
According to Binance and stablecoin issuer Paxos, crypto traders and users often transact with the BUSD stablecoin to protect value from crypto market volatility.
Explained, each unit of BUSD is backed by the US dollar, and the token reached a market capitalization of $20.6 million and placed it in third place with other stablecoin groups, while Tether (USDT) is worth $67 million and USD Coin (USDC) is $50 billion.
Although Ethereum (ETH) recently launched a merge to lower energy consumption, its network is still hampered by slow and expensive transactions, compared to the much cheaper and faster Avalanche and Polygon.
For context, the move comes shortly after Binance delisted stablecoins USDC, USDP and TUSD by converting existing deposits to BUSD.
The justification is that BUSD is fiat-backed at a 1:1 ratio by the US dollar, meaning that for every unit of BUSD issued, Paxos will hold one US dollar as FDIC-insured US bank reserves.
