Paxos recently released an unaudited transparency report for PayPal’s new stablecoin, PYUSD, a decisive response to ongoing market skepticism. This move demonstrates a commitment to transparency and seeks to assure investors of its reserve’s integrity.
Stablecoins and Their Struggle for Trust
Historically, stablecoins, especially those backed by fiat currencies, have been met with skepticism. The crypto community always casts a doubting eye, questioning their reserve backing. Against this backdrop, the unveiling of PayPal USD (PYUSD)’s report is a bold and commendable step.
According to Paxos’ transparency report, a staggering 44,376,440 PYUSD is circulating. Notably, these tokens are backed by a robust $45,360,147. These assets are “US Treasury collateralized Reverse Repurchase Agreements” and “cash deposits at insured depository institutions,” ensuring utmost safety and security.
Follow CryptoMode on Twitter, Youtube and TikTok for news updates! Paxos elaborated on the nature of Reverse Repurchase Agreements to demystify some jargon, stating: “It’s a binding agreement between two entities. One party agrees to sell securities to the other at an agreed-upon price, with a promise to repurchase those securities later at a (usually higher) predetermined price.“
Asset Backing: Over 100% for PYUSD
While the numbers are reassuring, an even more significant revelation is that PYUSD’s assets exceed its stablecoin’s backing by more than 100%. A caveat, though: an independent third party is yet to verify these claims through an audit.
Paxos has announced that WithumSmith+Brown, a renowned independent accounting firm, will soon audit this attestation report to instill confidence further. Investors and enthusiasts can expect the release of this audited report within the month.
Community’s Positive Reception
The broader crypto community has hailed Paxos’ transparency efforts. This proactive approach significantly bolsters trust and adds a much-needed layer of stability to PYUSD.
Just last month, the collaboration between PayPal and Paxos saw the birth of PYUSD. Despite the initial buzz in the crypto circles, the stablecoin is still navigating its path to widespread adoption. The journey might have just become a tad smoother with this transparency report.
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