CoinDesk writes that "Tether Reports Record $​2.​85B Profit as Biggest Stablecoin Nears $​100B Market Cap," which tells us, "Stablecoin issuer Tether reported a '​record-​breaking' $​2.​85 billion of profits last quarter as its flagship token USDT neared a $​100 billion market capitalization. The latest quarterly attestation ... showed some $​1 billion of the profit came from the interest earned on the company'​s vast U.​S. Treasury, reverse repo and money market fund investments, which are held to back the USDT stablecoin, according to a Tether blog post. The rest came '​primarily' from appreciation of Tether'​s other investments such as bitcoin (​BTC) and gold." We also heard from Adam Ackermann, Paxos' Head of Treasury & Portfolio Management, who recently published a memo saying, "Stablecoins are core to Paxos' strategy and our stablecoin reserve management practices differentiate our products in the marketplace. We have a steadfast commitment to operating a best-​in-​class, in-​house portfolio management function responsible for the prudent oversight and investment of Paxos-​issued stablecoin reserve assets. A key pillar of our approach that aligns to our regulated status and differentiates us from many of our competitors is that we hold ourselves to a fiduciary standard to ensure the prioritization of customer assets and interests above our own. While I am specifically highlighting PYUSD below, our approach is consistent across all Paxos-​issued stablecoin reserve asset portfolios." He explains, "Paxos publishes two key documents for PYUSD on our website every month: PYUSD Reserve Report - Self-​disclosed details on the composition of all assets that back PYUSD (​December 2023) and PYUSD Attestation Report - Third-​party issued examination of Paxos' compliance with attestation standards established by the AICPA (​December 2023). As reflected in both reports, PYUSD'​s market cap hit $​270M by December 29 and has now surpassed $​300M, making it the fastest growing stablecoin in its first months since launch. This safe, regulated stablecoin represents the first successful partnership between a blockchain infrastructure platform like Paxos and an established global payments platform, PayPal. The PYUSD reports provide valuable insight and transparency into how Paxos approaches its business and operations. Several key observations: Paxos only holds the highest-​quality liquid assets to back PYUSD: Reserve asset portfolio composition is a mix of cash, short-​term U.​S. Treasury Bills with maturities less than 3 months, and overnight repurchase agreements overcollateralized by U.​S. Treasury securities. This conservative list of eligible assets is consistent with guidelines stipulated by Paxos' prudential regulator, the New York Department of Financial Services (​NYDFS). The highly liquid and short-​term nature of the reserve'​s backing PYUSD insulates customer funds from market volatility and preserves the integrity of the 1:​1 dollar peg." Ackermann adds, "Paxos-​issued stablecoins are more conservatively managed than money market funds because of our prudential regulation from the NYDFS: Money Market Mutual Funds are public investment vehicles that serve as primary liquidity tools for retail and institutional investors."

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