Stablecoin issuer of bitcoin exchange Huobi has announced a 100% fiat backed asset
The HUSD steiblocoin has been fully funded by cash in US money market deposit accounts, according to its issuer, Stable Universal. This was announced by its issuer, Stable Universal.
The team at HUSD is releasing our own breakdown and analysis of the reserves backing the $HUSD stablecoin. And we are willing to build on the increasing transparency of the stablecoin market.
According to CoinGecko, HUSD ranks ninth among stable coins with a capitalisation of $512.9 million.
The issuer had previously published EideBailly audited monthly reports on HUSD's compliance with full collateral, but its composition was not disclosed.
"Currently, HUSD's reserves consist 100% of cash held in money market deposit accounts. "Cash equivalents, which include US treasury bonds, bank certificates of deposit and acceptances, commercial paper and other money market instruments, are not represented in the asset basket," Stable Universal said in a statement.
The issuer did not specify the date of the report.
Money market deposit accounts are opened by banks or credit unions and carry a higher interest rate than current accounts. They differ from money market funds, which invest directly in debt securities.
"HUSD ensures that each Stablecoin is backed by one US dollar held in the safest form. This creates sufficient liquidity and guarantees that customers can convert stablecoins into fiat in real time, regardless of market volatility. We plan to continue to maintain reserves in such a way that their balances match or exceed the HUSD in circulation at any given time," the company explained.
An updated version of bitcoin exchange Huobi's stablecoin HUSD was released in July 2019. Its issuers were Stable Universal and Paxos Trust Company.
Earlier, Circle disclosed information about the collateral of its stabelcoin. Cash and cash equivalents formed 61% of USD Coin's (USDC) reserves, with the remaining coins backed by bonds and other highly liquid assets.
Stablecoin issuer Tether (USDT) disclosed its reserves in its May quarterly report. 76% of the coins are backed by cash and cash equivalents, while the rest are backed by bonds, digital assets and other instruments.
As a reminder, Paxos' stackcoin reserves - Paxos Standard (PAX), Binance Dollar (BUSD) - are 96% cash and cash equivalents and 4% treasury bills.
At the end of May, the total capitalisation of staplecoins exceeded $100bn. Matthew Gould, head of decentralised domain registrar Unstoppable Domains, predicted the staplecoin market would grow to $1 trillion by 2025.
In July, US Federal Reserve Chairman Jerome Powell questioned the need for stablcoins. He compared stablecoins to money market funds and savings banks.
In July, US Treasury Secretary Janet Yellen called for an early regulatory framework for stablcoins.
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