It has been revealed that the circulation of the stablecoin "PYUSD (PayPal USD)" issued in partnership between payment giant PayPal and cryptocurrency-related company Paxos has dropped significantly in March.
According to a report released by Paxos, the circulation of PYUSD in March was $188.5 million (approximately 29.1 billion yen), a 39% decrease from the previous month.
Paxos is regulated by the New York State Department of Financial Services (NYDFS). In addition to PayPal, MasterCard and Interactive Brokers are also used.
In early 2023, Paxos announced that it would issue PYUSD in partnership with PayPal. It then began issuing in August of the same year. PYUSD is a stablecoin backed by US dollar deposits, U.S. Treasury bonds, and cash equivalents.
The circulation of PYUSD peaked earlier this year. In January, it was $301 million, and in February, it was $304 million. As of the 29th of last month, PYUSD held $14.9 million worth of U.S. Treasury securities as collateral, maintaining a notional value of $14.8 million.
The report further describes the use of reverse repurchase agreements, which are contractual arrangements for the sale and repurchase of securities. Paxos overcollateralizes its U.S. Treasury securities and enters into next-day maturity reverse repurchase agreements with reputable financial institutions. In the event of a counterparty default, Paxos can liquidate its U.S. Treasury collateral to cover losses, significantly reducing risk.
The total market value of PYUSD collateral in U.S. Treasury-backed reverse repurchase agreements is $177.9 million, with the notional value of the position being approximately $174 million. PYUSD has a total net asset value of $192 million and a notional position value of $189 million.
On the 4th, PayPal announced that it would integrate PYUSD into its remittance platform Xoom, allowing users to send money overseas without transaction fees. Users will be able to convert PYUSD back to dollars from their linked PayPal accounts and use them. Remittances can be made to recipients in 160 countries around the world.
Reference: Materials
Image: Shutterstock
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