This brings us to the final topic, about which of these stablecoin backing is the best?
If we start with Tether, the largest stablecoin issuer company. Their reserve chart recently revealed was posted without any oversight of any accounting or auditing firm.
While Paxos and Circle do provide attestations of their reserves on a monthly basis, which is not quite convincing since an attestation is nothing more than a verification from a third party based on the information shown to them. While an audit is when the third parties goes digging all the paperwork to see what’s not being shown to them.
With that being said. In fact, Paxos does get audited from time to time because it is a trusted company regulated by the New York state Department of financial services or NYDFS. Trust company means that Paxos can only hold assets that are in the safest forms in order to assure to their users that dollars are immediately available when they want them back.
This is the big difference between Paxos and other two major companies.
This means that users who hold BUSD can know for sure that they can cash out even if the crypto market is collapsing.
On the other hand, Almost 60% of Tether reserve are commercial paper that stands on the opposite end of safety spectrum, Which means that their reserve depends literally on the corporate these commercial paper came from.
The origin of Circle’s commercial paper is also unknown, beside their other assets that are not nearly as liquid as cash equivalent.