The token had so far been available on Ethereum and BNB Chain.
Each unit of BUSD is backed by one U.S. dollar, making it a fiat-backed stablecoin, according to Binance and the stablecoin’s issuer Paxos, according to Binance. Traders and crypto users often transact with stablecoins like BUSD to hedge against the volatility in crypto markets.
The token last week reached a $20.9 billion market capitalization, placing it third among stablecoins by value, according to CoinGecko. Tether (USDT) and USD Coin (USDC) are valued at $67 billion and $50 billion, respectively.
While Ethereum recently underwent its long-awaited merge, which dramatically lowered its energy consumption, the network is still hampered by slow and expensive transactions. Avalanche and Polygon, meanwhile, are significantly cheaper and faster.
The move comes as Binance effectively delisted rival stablecoins USDC, USDP, and TUSD at the start of September, by converting existing and new deposits of those tokens into BUSD.
Two weeks later, leading Indian crypto exchange WazirX followed suit, citing efforts to “enhance liquidity and capital efficiency for users.”
The rise of stablecoins
Stablecoins have been getting a lot of flack recently, following the collapse of algorithmic stablecoin TerraUSD (UST) earlier this year. The downturn wiped out millions of dollars and helped snowball the ensuing crypto winter.
Unlike Terra’s UST, BUSD is fiat-backed at a 1:1 ratio to the greenback, meaning that for every unit of BUSD issued, Paxos holds one U.S. dollar in reserve in FDIC-insured U.S. banks.