Who issues Binance USD (BUSD)?

BUSD is issued by Binance in partnership with Paxos. Paxos is a financial technology company  based in New York that issues Binance USD (BUSD), a stablecoin that is pegged to the value of the US dollar. BUSD is issued by Paxos in a process called "minting". To mint BUSD, Paxos will hold an equivalent amount of US dollars in reserve and then issue a corresponding number of BUSD tokens. These tokens can then be traded on cryptocurrency exchanges, with each token representing one US dollar.

To "redeem" BUSD, holders can exchange their BUSD tokens for the equivalent amount of US dollars held in reserve by Paxos. This process ensures that the value of BUSD remains stable, as it is always backed by an equivalent amount of US dollars.

Paxos is a regulated company, and BUSD is subject to regular audits to ensure that it is fully collateralized (backed by enough US dollars to support its market cap). This provides assurance to users that their BUSD tokens can be redeemed for US dollars at any time.

Who issues Tether (USDT)?

The Tether (USDT) stablecoin is issued by Tether Limited, a company that provides blockchain-based financial services. Tether Limited is incorporated in the British Virgin Islands, and it is not a regulated entity in the United States.

However, Tether Limited has entered into partnerships with various financial institutions in the United States, such as Deltec Bank & Trust Limited, to provide services to US customers. These partnerships may be subject to certain regulatory requirements in the US, but Tether Limited itself is not directly regulated by any US regulatory agencies.

The off-shore nature of Tether Limited makes them slightly less safe overall than BUSD, which has displayed higher degrees of regulatory compliance through the issuer Paxos.

BUSD and USDT adoption in DeFi

USDT arguably has greater adoption throughout decentralized finance (DeFi) protocols across Ethereum, Polygon, Avalanche and all non-Binance Smart Chain networks. Tether (USDT) serves as the backbone of liquidity for key DeFi legos including the Curve Finance and Convex Finance ecosystems.

USDT has more Total Value Locked and a greater overall market capitalization in the market, which suggests it has greater adoption in decentralized and centralized finance. You can get more granular data about stablecoins and their liquidity across various chains on Defillama Stablecoins.

Stablecoin Market Capitalization and Data.

Final Thoughts: BUSD or USDT?

In conclusion, whether you choose to use USDT or BUSD will depend on your individual needs and preferences. If you are looking for a stablecoin that is backed by US dollars and subject to regular audits, then BUSD may be the choice for you.

On the other hand, if you need a stablecoin that has greater adoption in decentralized finance (DeFi) protocols, then USDT may be the better option. You’ll have to weigh the pros and cons of each stablecoin before deciding which one is right for you. Ultimately, both BUSD and USDT are reliable and safe options when it comes to long-term storage or exchanging for other cryptocurrencies.