Stablecoin issuer Paxos, in one of the latest developments, released the first transparency but unaudited report for the recently born Paypal USD, or PYUSD stablecoin, affirming the stability and reliability of the assets.

This latest report also highlighted that, as the curtains fell in August, the lion’s share – over 90% – of PYUSD was held in Paxos wallet, with another approximately 7% scattered across various exchanges such as Kraken, Gate.io, and Crypto.com. 

Paxos’ PYUSD Report Now Out! 

The first report unveils the performance metrics of Paypal USD stablecoin, as observed in its debut month, i.e., August 2023. As of August 31, 2023, the number of outstanding PYUSD tokens amounted to $44.4 million, with a notional position value of about $44.5 million.

Interestingly, the asset composition for PYUSD is majorly backed by U.S. Treasury reverse repurchase agreements. In layman’s terms, a reverse repurchase agreement is a deal between two parties. In this arrangement, one party pledges to sell securities to the other at a predetermined price but also commits to repurchase them later.

In the case of Paypal, 97% of the PYUSD – approximately $43 million, is backed by the agreements, under the stewardship of Paxos, but benefiting the PYUSD holders. 

Paxos provided reassurance concerning this setup, articulating:

“Our repurchase agreements are overnight maturity with reputable financial institutions and overcollateralized with the U.S. Treasuries.”

In the unlikely event of a default, Paxos will sell off the U.S. treasury assets to redress any balances. Given that the assets are overcollateralized with U.S. Treasuries, Paxos confidently asserts that the prospect of loss is virtually negligible.

Aside from the amounts backed by reverse repurchase agreements, Paxos holds about $1.5 million in fiat. 

Paxos clarifies that not all fiat deposits are covered by the Federal Deposit Insurance Corporation (FDIC) or private insurance. As such, there could be potential l