Paxos Successfully Redeems $7.9 Billion BUSD Without Market Chaos

03/17/2023 14:08 • Digital Disruptors • 104 views

According to reports, Paxos disclosed on its official website that after announcing on February 13, 2023 that it would stop casting new BUSD tokens and terminate its relationship with Coin Security, the platform has processed over $7.9 billion in BUSD redemptions in the past 32 days, accounting for nearly 50% of the current BUSD, without causing any losses to customers or causing market chaos, and has managed all customer assets in accordance with the New York State Bank Law to avoid bankruptcy. Paxos stated that currently all BUSDs are hosted by NYDFS Trust and fully supported by USD cash and cash equivalents at a 1:1 ratio. Paxos will provide support for the circulation of BUSDs for at least one year, and all other Paxos products will not be affected by BUSD redemptions.

Paxos: Process over $7.9 billion in BUSD redemptions within 32 days, and will provide support for at least another year

Analysis based on this information:

Paxos, a New York-based blockchain infrastructure company, achieved a remarkable feat within just 32 days after announcing the termination of its partnership with Coin Security and the discontinuation of token minting of BUSD (a stablecoin pegged to the US dollar). The firm processed over $7.9 billion worth of BUSD redemptions, which counts as nearly 50% of the total BUSD supply. It is noteworthy that this massive redemption did not cause any loss to customers or market chaos.

The company revealed that it complied with the New York State Bank Law to safeguard all customer assets from bankruptcy. Currently, all the BUSD holdings are in the NYDFS Trust, which is backed 1:1 by USD cash and cash equivalents. Moreover, Paxos reassured that its other products and services would remain unaffected due to the redemption event.

One of the most significant challenges that Paxos would have faced during this period is the sudden redemption of such an enormous amount of BUSD, which could cause the value of the stablecoin to go down. However, Paxos seems to have managed this extremely well, suggesting that the redemption process was manageable without causing market tumult.

Interestingly, Paxos will continue to support the circulation of BUSD for at least one more year, indicating that BUSD’s usage is not entirely over. Instead, Paxos may have planned to discontinue token minting to ensure better stability and sustainability for the long haul.

In conclusion, Paxos accomplished a remarkable achievement while redeeming $7.9 billion without any market chaos, loss to customers or assets, and complying with the New York State Bank laws. This event showcases how the firm efficiently manages its digital assets and provides stable and reliable services to its clients, ensuring their trust and safety.

Overall, the event highlights how Paxos’s adherence to regulatory norms, efficient management of customer assets, and responsible business practices contribute to the confidence and success of the blockchain industry.

This article and pictures are from the Internet and do not represent aiwaka's position. If you infringe, please contact us to delete:https://www.aiwaka.com/2023/03/17/paxos-successfully-redeems-7-9-billion-busd-without-market-chaos/

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.