Paxos Releases First Transparency Report for PYUSD Stablecoin
Stablecoin issuer Paxos has published the first transparency report for its recently launched Paypal USD (PYUSD) stablecoin. The report, although unaudited, affirms the stability and reliability of the assets. It reveals that over 90% of PYUSD is held in Paxos wallets, with the remaining 7% scattered across exchanges such as Kraken, Gate.io, and Crypto.com.
PYUSD Performance Metrics
The report provides performance metrics for PYUSD in its debut month of August 2023. As of August 31, there were $44.4 million worth of outstanding PYUSD tokens, with a notional position value of about $44.5 million. The majority of the asset composition is backed by U.S. Treasury reverse repurchase agreements.
Paxos’ Assurance and Asset Coverage
Paxos assures that 97% of PYUSD, approximately $43 million, is backed by overnight maturity reverse repurchase agreements with reputable financial institutions and overcollateralized with U.S. Treasuries. In the unlikely event of default, Paxos will sell off the U.S. treasury assets to cover any balances.
Aside from the reverse repurchase agreements, Paxos holds around $1.5 million in fiat. However, not all fiat deposits are covered by insurance, so potential losses may occur in case of bank insolvency.
Increasing Adoption and Community Response
Bitpay has recently added PYUSD as a payment option, indicating growing adoption. Other exchanges like Kraken, Gate.io, and Crypto.com also hold some PYUSD. The release of the transparency report has been praised within the crypto community for enhancing trust and stability in PYUSD.
Despite positive feedback, Paxos has yet to release around 36.9 million PYUSD tokens, and the adoption rate is slower than expected.
Hot Take: Paxos Boosts Trust in PYUSD with Transparency Report
Paxos’ release of the transparency report for PYUSD has received widespread praise for increasing trust and stability in the stablecoin. The report reveals the asset composition, performance metrics, and assurance provided by Paxos. While the adoption rate is slower than anticipated, recent developments such as Bitpay adding PYUSD as a payment option indicate growing acceptance. However, Paxos still needs to release a significant number of PYUSD tokens. Overall, the transparency report serves as a positive step towards building confidence in PYUSD among crypto users.
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