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BUSD burn and its Ethereum connection: All you need to know

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Post BUSD burn, Binance releases collateral on Ethereum: Details inside

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  • On 22 February, Binance burned $2 billion worth of BUSD.
  • BUSD went a bit over its peg after the burn as its reserve on Binance continued to reduce.

Issues with the Securities and Exchange Commission have made Binance USD [BUSD] a major topic of conversation. However, despite this, work with the stablecoin proceeded as normal. Inasmuch, the official account of Binance revealed it would burn about $2 billion worth of BUSD on 22 February. 

Furthermore, Binance would release an equivalent amount, used as collateral, on the Ethereum [ETH] network.

After the announcement, a trace of the BSCscan showed that the burn had happened. According to the scanner, the stated sum was transmitted from a Binance address to a burn address in a single transaction on 22 February at 04:14:27 PM +UTC.

Peg sustained as volume remains high

BUSD traded above the $1 peg after the burn, according to the spot price on CryptoQuant. One Binance USD was worth $1.02 as of the time of writing. Going beyond the peg is not unusual for the stablecoin, but the current price demonstrated no adverse reactions to the event.

Binance USD (BUSD) spot price

Source: CryptoQuant

Santiment’s volume indicator also showed a relatively high Binance USD transaction volume. With the trade session still open as of this writing, the volume registered was over eight billion.

BUSD volume

Source: Santiment

BUSD reserve sees continuous dip

Three billion dollars’ worth of Binance USD was redeemed after Paxos’ 13 February announcement that it would cease minting the stablecoin. In addition, the total BUSD held in exchange reserves has decreased from $14.3 billion to $10.7 billion. So, a decrease of over 21% or over $3 billion has been recorded until press time.

Binance BUSD reserve

Source: CryptoQuant

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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