Paxos has released an unaudited transparency report for PayPal’s PYUSD showing that the total assets held in custody meet or exceed the token balance.
Stablecoin, backed by fiat, has always received skepticism from the community whether they have adequate backing. Hence, the new kid on the block, PayPal USD (PYUSD), has released a transparency report boasting of its reserves.
PayPal PYUSD Fully Backed by US Treasury Debt and Cash Deposits
The screenshot below from the Paxos transparency report shows that there is a total of 44,376,440 PYUSD outstanding. The outstanding tokens are backed by around $45,360,147 worth of assets in “US Treasury collateralized Reverse Repurchase Agreements” and “cash deposits at insured depository institutions.”
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Paxos explained Reverse Repurchase Agreements in its report:
“This is a contractual arrangement between two parties, where one party agrees to sell securities to another party at a specified price with a commitment to buy the securities back at a later date for another (usually higher) specified price.”
PYUSD Winning Community Trust?
This report adds that PYUSD has assets that back the stablecoins by over 100%. However, it is worth noting that a third party has yet to audit the report.
Nonetheless, the issuer Paxos has mentioned that an independent third-party accounting firm, WithumSmith+Brown, will audit its attestation report. Lastly, the company says it plans to release the attestation report later this month.
Community members have welcomed the move from Paxos and stated that the report adds a layer of trust and stability to PYUSD. An X (Twitter) user, Crypto Simon, wrote:
“That’s significant news for the crypto space, especially for those who use or are considering using PYUSD. It adds a layer of trust and stability to the stablecoin.”
Last month, PayPal launched PYUSD in collaboration with Paxos. While there has been significant hype about PYUSD in the crypto community, the stablecoin has so far failed to convert that hype into adoption.
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As a matter of fact, around 36.9 million PYUSD tokens remain unreleased by the project, suggesting a lack of adoption. The unreleased portion makes up over 80% of the total tokens outstanding.
Only time will tell if the project manages to drive the adoption of PYUSD through initiatives like the transparency report.
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