Binance Global, the world’s largest crypto exchange, has acknowledged flaws in its systems that under-collateralized its BNB Smart Chain-based BUSD stablecoin by up to US$1 billion on at least three occasions, according to a Wednesday report from Bloomberg.See related article: Binance stablecoin conversion controversial, but what does it mean for users?Fast factsThe token, otherwise known as Binance-pegged BUSD, is designed to maintain a stable value of US$1 via reserves of another version of BUSD running on the Ethereum blockchain.The Ethereum-based BUSD is collateralized by U.S. dollars and is overseen by New York-based financial technology firm Paxos Trust Company, LLC. Binance claims this version is fully backed by fiat.“The process of maintaining the backing involves many teams and has not always been flawless, which may have resulted in operational delays in the past,” a Binance spokesperson said, according to Bloomberg. “Recently, the process has been much improved with enhanced discrepancy checks to ensure it’s always backed 1 [to] 1.”The spokesperson added that no customers were impacted despite these discrepancies, but did not confirm how long the Binance-pegged BUSD was uncollateralized for in total nor when the company first became aware of the issue.Binance made a controversial decision in September to convert customers’ holdings of three stablecoins, USDC, Pax Dollar (USDP) and True USD (TUSD), into BUSD, in a move the company said would “enhance liquidity and capital efficiency for users.”Stablecoins play a major part in the crypto industry by allowing investors to maintain a constant value within the often-volatile ecosystem. Four of the top 15 cryptocurrencies by market capitalization are stablecoins — including BUSD which currently has the seventh highest market cap in the industry with US$16.4 billion, according to CoinMarketCap.Binance-pegged BUSD was designed to allow the stablecoin to operate on Binance’s own blockchain and accounts for US$5.4 billion of BUSD’s total market cap.See related article: Binance move to remove USDC and others raise questions about market conduct