We assess Paxos USD (USDP)'s ability to maintain a stable price vis-à-vis the U.S. dollar at 2 (strong). Our asset assessment of 2 (strong) reflects USDP's highly liquid, low-risk reserves. These are held and maintained as either (i) cash deposits at various banking institutions (ii) U.S. treasury bills held by Paxos Trust Co., or (iii) reverse repurchase agreements (repos), backed by treasury bills or money market funds, held by Paxos Trust Co. Paxos Trust Co.'s issuance of U.S. dollar-backed stablecoins has been under the supervision of the New York State Department of Financial Services (NYDFS) since 2018. We note that cash deposits can be held at various rated as well as unrated U.S. financial institutions, albeit under the supervision and restrictions of the NYDFS. We have not made any adjustment, considering the NYDFS regulation of USDP, as well as USDP's governance and direct redeemability with Paxos. These factors, in our view, offset the lack of secondary market liquidity.