Stablecoin Transparency and HUSD Reserves Breakdown

HUSD
3 min readAug 5, 2021

In light of the recent conversations around the transparency into the assets backing stablecoins and the allocation of reserves, the team at HUSD is releasing our own breakdown and analysis of the reserves backing the HUSD stablecoin. The purpose is to build on the increasing transparency of the stablecoin market, as well as adhere to the three pillars of transparency, security, and stability which are at the core of our products. The information below offers an update on HUSD, a breakdown of HUSD’s reserves allocation, and an overview of Huobi Trust, the custodian of the cash reserves.

What is HUSD

HUSD is the US dollar-backed stablecoin issued by Stable Universal Limited, a technology startup venture. Combining the features of the U.S. dollar with the efficiency of blockchain technology, HUSD is designed to be secure, liquid, and convenient. It is one of the top stablecoins in the market, supported by 100+ CeFi and DeFi platforms and applications.

Launched in 2019, HUSD has seen many milestones since its inception, including:

  • December 2019: Surpassed $100 million in circulating supply
  • June 2020: Surpassed $1.6 billion in token issuance and $3 billion in processed transactions
  • February 2021: Surpassed $500 million in circulating supply
  • May 2021: Surpassed $1 Billion in circulating supply
  • June 2021: Appointed Huobi Trust as the new custodian of the reserves backing HUSD

For more information on HUSD, visit www.stcoins.com.

Breakdown and Analysis of HUSD’s cash reserves

The reserves backing HUSD are currently held entirely in cash and cash equivalents inside cash and money market accounts. The custodian of the cash reserves is a Nevada-licensed retail trust company (www.huobitrust.com). The reserves are attested monthly by an independent US-based certified public accounting firm. The attestation reports are updated monthly here: https://www.stcoins.com/attestation/index.

Breakdown of HUSD’s asset composition against other major stablecoins (based on their recent reports) below:

In this model, the HUSD stablecoin ensures that each HUSD is backed by 1 US Dollar, held in its safest form to ensure:

  1. The balance of assets held in reserve can be attested against the volume of HUSD in circulation at all times;
  2. Sufficient liquidity and guarantee for customers to redeem their stablecoin assets for fiat in real-time, regardless of market volatility;
  3. Lowest risk and peace of mind for the customers knowing that their assets are 100% backed by fiat cash.

In a volatile crypto market, the reserves backing HUSD are held in cash to accommodate potentially large and frequent withdrawals with a guarantee of 1:1 redemption to USD. The plan is to hold these reserves in only cash, cash equivalents, and short-term, low-risk financial instruments to ensure that the balance of assets held in reserve either meet or exceed the volume of HUSD in circulation at all times. The maintenance and administration of these assets are conducted by a Nevada regulated trust company, and attested by an independent accounting firm.

The question that has arisen in light of recent reports and new regulatory conversations is whether stablecoin issuers can guarantee 1:1 redemption for customers in the risk of large and sudden withdrawals in an extremely volatile market (one that is not impossible for the digital asset market). Our answer to this is the assurance that our reserves are backed 100 percent by low-risk, short-term, and liquid assets. We encourage our customers to do their own research and due diligence into the assets which they hold, particularly as the industry moves towards a more transparent and regulation-friendly environment.

About Huobi Trust

Huobi Trust Company (“Huobi Trust”) is a Nevada state-chartered retail trust company with a mission to deliver secure financial solutions built on blockchain technology. A strict commitment to the “gold standard” of global compliance and an integrity-driven culture are at the core of the company’s products and business. Funds stored with Huobi Trust are protected by advanced security protocols and undergo regular exams and attestations. Huobi Trust currently offers fiat custody and a range of compliance services for blockchain companies.

Learn more at https://huobitrust.com.

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HUSD

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