BUSD (Binance USD) is a regulated, fiat-backed stablecoin pegged to the U.S. dollar. For every unit of BUSD, there is one U.S. dollar held in reserve. In other words, the supply of BUSD is pegged to the U.S. dollar at a 1:1 ratio. Holders can swap their tokens for fiat and vice versa. Paxos, the project’s owner, releases monthly audits of BUSD’s reserves.
As a stablecoin, BUSD is designed to maintain a stable market value. It allows investors and traders to hold a low-volatility asset on the blockchain without the need to exit the crypto space.
BUSD is used, for example, when providing liquidity to the XEP/BUSD trading pair on PancakeSwap.