Regulatory oversight increases the risk of censoring endpoints of the stablecoin's network (such as the issuer, banks and custodians) as well as users. A score of 0 indicates a high degree of government censorship risk.
USDP’s issuer, Paxos, is regulated by the NYDFS as a stablecoin issuer. Further, all custodians who hold assets on behalf of Paxos’s customers are regulated financial institutions pre-vetted by the NYDFS.
Note: Censorship resistance is not a key objective common to all stablecoins. Consequently, a low score may not be a relevant source of concern to most stablecoin users. Furthermore, regulatory oversight can also be beneficial to some users as it entails more robust consumer protection mechanisms and increased transparency.