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- 1 Paxos released a transparency report recently and shared some details about PYUSD.
- 2 It says that PayPal Stablecoin is backed by the US treasury reserve repurchase agreements and cash reserves.
- 3 The issuer also divulged some other details that give a brief idea about the project’s ongoing operations.
PayPal is the most popular and widely used payment processor in the world. It is known for being the go-to payment method for millions of professionals. But the company did not want to stop at that, it is keen to adopt new technologies as well. As per the studies, Stablecoin will become popular among crypto users. Moreover, the usage of crypto is only going to increase.
So, PayPal took a wise step by launching its own stablecoin, PYUSD. The coin created a lot of buzz and showed some promising prospects too. Now, stablecoins are supported by some real-life assets.
So many people have questions about PYUSD’s source of backing. Paxon, the issuer of the assets, responded to this and revealed some information about it.
Source of Support For PYUSD
In a transparency report released recently, Paxos said that US Treasury reserve repurchase agreements and cash reserve support this coin. The report also divulges the details in numbers. It shows that the treasury securities back $45.36 Million. Out of which, $1.5 Million is in cash reserves. The recorded number shows the status till August 3, 2023.
Furthermore, it describes repurchase agreements as well for the uninitiated. As per the definition, they are identified by overnight maturity with reputable financial institutions. It also factors in the over-collateralization with the US treasuries. It has been 38 days since the launch of PYUSD. Based on the market cap, the asset has attained 411th rank out of 10,000 crypto assets.
Talking about collaborations, Paxos said that it has tied up with State Street Bank, BMO Harris Bank, and Customers Bank. In addition, it maintains an excess balance of FDIC insurance limits to support overnight and weekend liquidity. As of September 14th, 611 wallets hold PYUSD. But only 100 of them were accountable for 99.97% of its circulation.
It should be noted that Paxos paid a big amount this week as a refund. The total sum was $510,750 (20 Bitcoins) over a $2,000 (0.7 Bitcoins) transaction. Later on, the concerned team blamed it on an error in the system. Mostly, the amount of fee depends on demand and network congestion. It could be anywhere between $5 to $20.
On top of that, Paxos is trying to recover the amount. Reportedly, it is already talking with Stake. fish about it. According to some sources, Stake. fish is not happy about it. Irrespective of what happens in this case, PayPal has made a mark in the crypto industry. It has delivered a potential solution that has the potential for extensive adoption.
How Significant is PYUSD for the World?
As mentioned above, PayPal is a ubiquitous application that gives PYUSD, infinite scope. The former can actually increase the usage of digital assets by offering the latter. With PYUSD, the users get a more efficient, faster, and safer solution. It also emerges as a more reliable option due to PayPal’s immaculate reputation. Thus, the crypto world is actually looking forward to this solution with lots of expectations.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
