Speaking at a Twitter AMA, the CEO of Binance, CZ, told listeners that the reason Binance has a good deposit of stablecoins is that it helps to protect users in a bearish market. Users want to sell other crypto assets like Bitcoin and Ethereum for stablecoins enabling them to maintain the value of their assets.
CZ affirmed that it is not risky for Binance to hold a large deposit of both BNB and BUSD. He explained that BUSD is safe because it is issued by an external body, Paxos; the most fiat-backed stablecoins; and is regulated by NYDFS.
The CEO added that BUSD is fully audited, and Paxos releases a monthly report of the asset. He also warned that exchanges without a good deposit of stablecoins are unhealthy.
Effect of FTX on Binance and the Crypto market
After a listener asked about the effect of FTX on Binance and the crypto market, CZ narrated that while it will affect the Binance ecosystem and the Crypto market in general, he cannot tell to what extent. In addition, he explained that if the pattern of the falling of Crypto firms repeats itself like that of Luna and 3 Arrows, then FTX has taken the big fall while lesser ripple effects would be seen in the market.
Talking about how safe Binance is, the CEO added that since the declaration of cold wallet assets of the exchange, there haven’t been significant withdrawals from Binance like is seen with other exchanges showing that Binance is safe for users.
For those who are scared about the safety of their BUSD, CZ assured them that they could redeem it from Paxos even if they move from one exchange to another.