When PayPal unveiled PYUSD last month, it highlighted the stablecoin’s potential for payments on a global scale. But the token’s first transparency report suggests its adoption has a long way to go—despite PYUSD being up against competitors with problems of their own.

The company that issues PayPal’s stablecoin, Paxos Trust, said it held $45.3 million in assets backing PYUSD at the end of last month. The report, published last week, represents the public’s first look at assets associated with $44.3 million PYUSD.

While PYUSD was backed with just over $1.5 million in cash deposits, a majority of the coin’s reserves were reverse repurchase agreements collateralized with U.S. Treasuries and worth $43.8 million, the report said.

Reverse repurchase agreements are effectively collateralized loans, where one institution sells securities to another, with the expectation that they’ll be bought back at a certain price, usually higher, at a future date.

As Paxos notes, its agreements involve trades with “reputable financial institutions” that have an overnight maturity, which ultimately reduces the risk of a loss to the point where it “is not deemed to be material.”

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Author: André Beganski

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