In the past, the currencies of some of the most powerful countries had their values directly linked to gold, exchanged for a specified amount determined by its international value.
However, as world governments have moved on from the gold standard, they have developed and deployed modern monetary policy tools to control the supply and demand of their currencies and deliberately adjust a country’s currency exchange rate.
One such tool is devaluation—a measure used to lower the purchasing power of a country’s currency strategically. While this strategy has a few positive use cases, such as giving a country a competitive advantage in global trade and reducing trade deficits, it also creates uncertainty.
For this reason, new investors and expert traders constantly seek to protect their investments and assets against devaluation and inflation.
In countries that have experienced extreme devaluations, cryptocurrency investments in stablecoins are no longer just an option but a necessity.
A recent report on the global state of crypto proves this through a survey carried out in 20 countries over six continents with 30,000 respondents.
The report shows that countries with over 50% devaluation of their currency against the USD over the last ten years are more likely to state that they plan to purchase crypto than those in countries that have experienced less than 50% currency devaluation.
In Brazil, the local currency has been devalued by over 200% against the USD, resulting in 41% of respondents owning crypto.
Against this backdrop, cryptocurrency exchanges like Binance have developed niche crypto assets called stablecoins. Binance USD (BUSD) was set up to create a cryptocurrency whose value is tied to an external asset (in this case, the US dollar) with zero volatility.
The BUSD is a stablecoin that has become one of the fastest-growing stablecoins with high demand in the crypto market. BUSD is also considered an in-demand choice for people looking to stabilise their funds and preserve the value of their assets.
As a result of its accessibility, it allows traders to process transactions with speed, ease, and flexibility. Another benefit is that users can trade with multiple contracts at any time.
As the world’s largest crypto exchange by volume, Binance played a critical role in the propagation of stablecoins and soon launched its own stablecoin.
As a result of its effective transaction confirmation speed, which outperformed most other stablecoins, BUSD currently ranks as the 6th highest crypto market cap with $18bn worth in circulation.
Moreover, it is one of the only stablecoins that provides monthly audits, making it a highly regulated asset.
A few weeks ago, the crypto world witnessed the downturn of a popular algorithmic stablecoin whose dollar peg was not backed by an offline dollar reserve but by complex algorithms and smart contracts.
Before the collapse, there had been continued speculation about the size of dollar reserves held by similar stablecoins, with some analysts going as far as to say stablecoin issuers were effectively printing dollars and potentially causing inflation by creating unbacked stablecoin tokens.
By comparison, BUSD routinely conducts full audits that are published every month. In other words, every BUSD token issued is backed by a US dollar in a bank vault, with a public auditor’s report proving it.
Considering that this level of transparency is not required in most jurisdictions where Binance operates, it’s a strong positive indicator that gives users the confidence to rely on BUSD as a trustworthy and dependable alternative to currency depreciation and devaluation.
Are you interested in purchasing and investing in BUSD? You can get started by downloading the Binance app and trading from anywhere in the world. Prospective users can get into the world of BUSD today.
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