Binance’s Proof-of-Reserves
In the latest episode of The Market Report, Marcel Pechman examines the crypto exchange Binance’s proof-of-reserves. His report reveals a significant decrease in USD Coin (USDC) from $3.4 billion on March 1 to $23.9 million by May 1.
On-chain analyst Aleksandar Djakovic suggests that Binance used the $3.4 billion to purchase 100,000 Bitcoin (BTC) and 550,000 Ether (ETH), amounting to $3.5 billion. Pechman questions whether this investment was made by Binance users or Binance CEO Changpeng Zhao and the company itself.
Pechman doubts this theory, however he does consider the possibility that the exchange accessed a portion of its USDC for margin or derivatives trades. Regardless, he finds it unlikely that the entire balance could be depleted without clients knowing or affecting the exchange’s day-to-day operations.
PayPal’s Stablecoin
Pechman then moves on to discuss PayPal’s imminent launch of a stablecoin, announced on Aug. 7. This stablecoin, created by Paxos Trust and based on the Ethereum blockchain, is similar to USDC and Paxos USD (USDP). Pechman points out that the stablecoin is integrated with PayPal and Venmo, which sets it apart from the other coins.
Cryptocurrency Stablecoin Benefits and Rumors
Pechman’s research concludes that the new stablecoin does not provide any tangible benefits to end users. He further points out that other stablecoins offer both yield and a larger presence in the decentralized applications market.
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