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Stablecoin Collateral: Why You NEED To Pay Attention!! 😨

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📺Essential Videos📺

Stablecoin Comparisons 👉
Stablecoin Crypto Market Risks 👉
Stablecoin Crypto Price Manipulation 👉
Tether Lawsuit Explained 👉


0:00 Intro
2:04 What Are Stablecoins?
5:26 Tether USDT Reserves
7:56 Circle USDC Reserves
10:32 Paxos BUSD PAX Reserves
12:10 What Are The Assets Backing Stablecoins?
14:30 Which Stablecoin Has The Best Collateral?
17:14 Conclusion


⛓️ 🔗 Useful Links 🔗 ⛓️

► Tether Transparency Reports:
► Tether USDT Reserves Breakdown:
► Circle Transparency Reports:
► Circle USDC Reserves Breakdown:
► Paxos Transparency Reports:
► Paxos BUSD PAX Reserves Breakdown:
► Tether Legal:


👨‍🏫What Are Stablecoins?👨‍🏫

Generally speaking, there are three types of stablecoins: fiat backed, crypto backed, and algorithmic. All of them ultimately maintain their dollar pegs by adjusting their supply based on demand

Fiat backed stablecoin issuers have historically not been very transparent about whether their tokens are fully backed by dollars

This has led to a lot of stablecoin competition in the crypto space, with each new fiat backed stablecoin company claiming that its tokens are backed by more dollars than its competitor’s tokens

🕵️‍♂️Tether USDT Reserves🕵️‍♂️

According to Tether, the USDT in circulation is backed by the following assets: 76% Cash, Cash Equivalents, Short Term Deposits, and Commercial Paper, 12.5% secured loans, 10% corporate bonds, funds, and precious metals, and 1.5% other assets, including digital tokens, AKA cryptocurrency

⭕Circle USDC Reserves⭕

According to Grant Thornton, the USDC in circulation is backed by the following assets: 61% cash and cash equivalents, 13% Yankee certificates of deposit or CDs, 12% US treasuries, 9% commercial paper, 5% corporate bonds, and less than 1 percent in municipal bonds

🏦Paxos BUSD PAX Reserves🏦

According to Withum, 96% of all Paxos stablecoins are currently backed by cash or cash equivalents, with 4% being backed by US treasuries

🤔What Are The Assets Backing These Stablecoins?🤔

Almost all of the assets backing the largest stablecoins are some form of debt, i.e. money that’s been lent out. If you’re wonder why all these stablecoin companies are holding so much debt, the answer is interest. The companies behind these stablecoins can make money on their clients’ money by lending it

🤼‍♂️Which Stablecoin Has The Best Collateral?🤼‍♂️

Tether’s account of what’s backing USDT should be taken with a grain of salt. That’s because they simply posted a pie chart without oversight from any accounting or auditing firm

While Paxos and Circle do provide attestations of their reserves on a monthly basis, an attestation is not the same as an audit

An attestation is just when a third party verifies the information being shown to them. An audit is when a third party actually goes digging through all the paperwork to see what’s not being shown to them

This is the biggest difference between Paxos and its two contemporaries is that it is a regulated trust, and that’s why such a large percentage of Paxos’ reserves are made up of cash and cash equivalents

Even if all their cash equivalents are debts of some kind, they are a form of debt that can be quickly redeemed for dollars regardless of market conditions. This makes Paxos’ stablecoins the best


📜 Disclaimer 📜

The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading cryptocurrencies poses considerable risk of loss. The speaker does not guarantee any particular outcome.

#Bitcoin #Tether #stablecoin #USDC #reserves #regulation

Source: Coin Bureau

28 Responses

  1. Which stablecoins do you guys prefer? I agree that the future is perhaps towards a decentralised algorithmic option such as UST, DAI etc etc. However, most of the volume today is in these centralised versions and the liquidity of their collateral is important for redemptions. Don't forget that you can follow me on my other social channels for the content you are not getting on YouTube 👉 https://guy.coinbureau.com/socials/

  2. 4:39 If EVERYONE cashes out, stablecoins actually will continue functioning 'cause crypto price would fall to 0. In other words, if there's really 0 buyers for an asset (at any price), this asset price equals 0. Also if there're no buyers people wouldn't be able to cash out at all, 'cause nobody will exchange their stablecoins for crypto.

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