It is becoming more popular to use cryptocurrencies. Other than Bitcoin, BNB and Ethereum, crypto assets like DeFis, NFTs, Stablecoins and others are also making their way into this ring.
One of the most widely used crypto currencies today is stablecoins like USD Coin (USDC) or Tether USDT (USDT).
This is a type of crypto with fixed currencies tied to them, making it one of today’s most popular.
Let’s take a deep dive and learn how to buy Binance USD (BUSD) in a few easy steps with this quick guide to the Binance USD token.
What is Binance USD (BUSD), and How Does It Work?
Binance in partnership with Paxos issued the Binance USD stabilitycoin, which is backed by 1 USD. The NYDFS (New York State Department of Financial Services) has authorized it and approved its regulation.
US dollars can be pegged at 1:1 to the token BUSD. Each BUSD token that is minted results in an additional 1 US Dollar to Paxos Reserve accounts, to support the BUSD issues.
Source: Medium Binance USD Logo
A user that purchases 1000 BUSD will get 1,000 BUSD and the Paxos reserve will increase by $1,000. The tokens can be burned if the user sells 1000 USD.
BUSD is a digital fiat currency that combines the stability of the US dollar and blockchain technology. It is digital fiat currency and it supports BEP-2. The blockchain allows you to send dollars immediately and without any fees.
What is the Use of BUSD?
BUSD can be used in multiple ways by crypto traders and investors.
- Beware of Price Fluctuations
When the cryptocurrency market becomes volatile, it is difficult to overlook the importance of having stable assets. BUSD allows you to convert your holdings into fiat currency in volatile periods.
- Profits without the need to convert Fiat
BUSD is a liquid way for investors to withdraw from an investment or secure the profits. You don’t have to wait for an exchange to transfer your fiat funds into your bank account.
- Transferrable
You can purchase the BUSD token on Binance Chains or Binance Smart Chains. Your tokens can be exchanged between any of the three blockchains at any moment.
How does BUSD work?
BUSD’s peg mechanism is simpler than other stablecoins. Every BUSD can be pegged to 1 USD using the reserve. You can burn your BUSD tokens by sending them to Paxos, and in return, you’ll receive fiat currency. The ratio between supply and reserve will therefore remain constant.
Arbitrage traders buy huge amounts of USD when the Binance USD prices fall below $1 for 1 BUSD. Arbitrageurs are able to convert Binance USD into fiat by using Paxos once they’ve purchased large quantities. The Binance USD (BUSD), price increases as BUSD demand rises. This restores the 1:1 peg.
How to buy BUSD on a Cryptocurrency Exchange
Binance and Coinbase are two of the most popular BUSD trading platforms. Before you can trade on cryptocurrency exchanges, it is necessary to create an account. Here’s a step-by-step guide to help you get started:
Step 1: Select an exchange
You can buy BUSD on a variety of crypto exchanges. Comparing the different exchanges can help you find the right one for you. Low transaction fees, an intuitive platform and 24-hour customer service are all important features.
Investing with some crypto brokers means you won’t have to pay commissions, which is a major advantage over others. Check to see if the exchange accepts other deposit options, such as a credit card or debit card or bank transfer.
Step 2: Register an account online
Once you’ve selected a reliable exchange, you need to open a trading account on the exchange to purchase Binance USD or sell BUSD.
For most transactions, we need information such as your name, contact information, email address, home address, social security number, and a copy of your driver’s license, passport, or government-issued ID.
You may need to provide additional information depending on what platform you select. This information is required in order to trade.
Step #3: Fund Your Account
You must first verify your account before you can purchase BUSD or any other cryptocurrency. BUSD coins are available in a variety of payment options depending on their location and preference, including debit and credit cards.
Step 4: Complete your purchase
You must place an order at the broker before you can buy BUSD. Like stock trading, there are many types of orders you can place. Below are two common orders.
Order on the market: When you place a market order, you’re telling your broker you want to buy BUSD immediately. It isn’t easy to control the price you pay per coin when you use market orders, and you may wind up paying a rate different from what is displayed on the exchange.
Limit order:Limit orders are used to indicate a range of prices at or below which BUSD you would like to buy. Your broker will then ask you for the number of coins that you wish to purchase, and how much you can afford each.
Only coins will be sent to you if the broker orders your items at or under your request price. Your broker could cancel your order in the event that the price exceeds your maximum limit.
Step 5: Create a wallet
To store your Bitcoin securely, choose a wallet that supports crypto currency. You can store your coins in your brokerage exchange wallet, but in this case, they’ll be vulnerable to hacking.
This is why we suggest that you build your private wallet with your unique set of keys. Software or hardware wallets may be more appealing depending on how you invest. But, generally speaking, hardware wallets offer greater security.
Place to Buy Binance USD
Now, let’s take a look at different types of wallets to store BUSD coins. You should choose the right wallet for you based on how much BUSD you have.
A Wallet is either software (Hot wallet) oder hardware (cold wallet).
Hardware Wallet
Cold wallets or hardware wallets, like Trezor or Ledger, are the best options as they can be used offline and offer backup. These are recommended for BUSD coin holders who have large quantities of tokens.
Ledger was established in 2014 and is a major manufacturer of hardware wallets. They use BOLOS to integrate secure chips into crypto hardware wallets. The BOLOS operating system provides security through the use of a pin code as well as a 24-word back-up phrase. It supports over 1,000 coins as well as all ERC20 tokens.
Ledger has an application called LedgerLive for crypto staking, lending, and can be downloaded to your phone or computer.
Software Wallet
Software wallets are also called hot wallets. Because the wallets can be connected to the internet, and you store your keys online they are more secure. Software wallets can be a great option for beginners who only have a handful of tokens. They are also free and easy to use.
Coinbase is one of most widely-used software wallets. It’s available on Google Play or the App Store free.
Selling Binance USD
Follow these steps to cash out your BUSD.
- Register to your cryptocurrency account by going to the exchange.
- Click the trading button, and then tap “Sell.”
- To select the amount of BUSD that you wish to sell, click on the drop-down menu.
- You can choose how you want to receive fiat currency. Binance provides a range of fiat channels. However, users from different countries may choose to receive the fiat currency through other channels.
- To complete the transaction, click “Submit.”
- You can close the deal by verifying the price, and the associated costs.
BUSD Tokenomics
Based on CoinStats’ data, Binance USD token reportedly has more than 17 Billion tokens in total.
As of the writing of this article, 17.95 billion Binance USD tokens are in circulation with a market cap of approximately $17 billion.
BUSD is currently trading at $1 per token. In the 24 hour period, Binance USD tokens worth approximately $3 Billion were traded.
Do You Need to Buy Binance USD?
Binance USD token conforms to ERC-20 regulations and is based upon the Ethereum blockchain. Exchange BUSD for USD in a 1:1 ratio.
It is recognized by the New York State Department of Financial Services as an exchange medium and can be used worldwide as a method of payment.
InvestorsObserver’s research indicates that Binance USD tokens represent a low risk investment. Binance USD’s price has dropped by 0.03% over the last 24 hours, resulting in its current value of $1.00.
The decline in Binance USD price coincides with the token’s trading volume being below its average level and the rising market capitalization of the token. BUSD has an estimated market capitalization at $17.95 Billion, and trades have totaled $4 Billion in 24 hours.
Binance USD can be a great investment because of its low volatility.
Crypto portfolio trackers like CoinStats can be used to keep track of all your cryptocurrency investments. This software can track each cryptocurrency’s performance and provide analytical tools that allow you to analyze the data.
Conclusion
BUSD is one among the few stablecoins that are highly controlled. A stablecoin refers to a cryptocurrency that is linked to an asset. USD can be used as a secure investment. It is also an essential tool for investors and traders due to its ease of use.
Paxos and Binance created the stablecoin and it complies to the NYDFS’s strict regulations. It is highly reliable because the coins are regulated. Also, reputable financial institutions regularly audit their reserves.
If you use Binance Smart Chain or Binance Chain regularly, the BUSD stablecoin is a good choice.