Binance and Paxos Trust Company, which issues the dollar-pegged stablecoin BUSD (Binance USD), released the first unaudited breakdown of the reserves backing the token on Aug. 1.
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Fast facts
- According to the reserve report, BUSD was backed by US$738 million in cash, representing 4.21% of total reserves, and US$10.6 billion in U.S. Treasury bills with a maturity of less than 90 days, as of June 30.
- The 17.4 billion BUSD tokens in circulation were also backed by another US$6.2 billion in U.S. Treasury collateralized reverse repurchase agreements with overnight maturities, the reserve report showed.
- U.S. Treasury bills make up around 60.5% of total reserves while repo agreements represent over 35% of the reserves.
- The reserve report also disclosed the cash custodians, most of which are insured by the Federal Deposit Insurance Corporation (FDIC).
- BUSD, which gets branding support from Binance, is issued by Paxos, and both the company and the stablecoin are regulated by the New York Department of Financial Services (NYDFS).
- Paxos holds customer assets in accounts segregated from corporate funds and in case the company fails, the NYDFS will return the assets to the users, according to Binance.
- Binance USD’s reserve report comes at a time when stablecoin issuers are scrambling to increase transparency as the market remains wary of stablecoins after the collapse of TerraUSD and regulators look to tighten rules for stablecoin reserves.
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