On Monday, the 10th of September 2018, New York-based blockchain startup Paxos has announced the launching of Paxos Standard or PAX, which is a fully USD-collateralized stablecoin, issued by the Paxos Trust Company, and approved, as well as regulated by the New York State Department of Financial Services or NYDFS.
Paxos Standard or PAX got announced on the 10th of September
Even though two regulated dollar-backed stablecoins, Gemini Dollar or GUSD and Paxos Standard or PAX, got published on the 10th of September, as the former was launched by the crypto exchange of the Winklevoss Twins, known as Gemini, it received a lot more attention by the media. However, the latter is only as interesting.
Paxos, which actually describes itself as the first regulated Trust company with blockchain expertise, is also building products to simplify settlement, as well as eliminate risk. Even though it was founded in 2012 as Bitcoin exchange itBit, the company was later rebranded it to Paxos, and also pivoted into a business focused on building a blockchain-powered modern settlement platform, but it still operates the custodian and crypto exchange itBit.
Facts about Paxos Standard
The press release of it is says that as a Trust company, it is a fiduciary and qualified custodian of customer funds, and can because of that offer greater protections for customer assets than any other stablecoin that exists.
Some of the essential facts which you should know about the it are the following:
It was built on the Ethereum blockchain and implemented as an ERC20 Ethereum token.
Verified it customers can buy and redeem tokens directly through Paxos.com on a 1:1 basis with USD.
When it tokens are in circulation, the dollars that correspond are held in reserve. Upon redemption for dollars, it tokens are immediately destroyed. Tokens are actually in circulation only when the corresponding dollars are in custody.
The investors that are trading digital assets through the itBit exchange or OTC desk have the option to withdraw digital holdings to it instantaneously.
Paxos Standard is actually available to be listed on some other venues and is going to trade under the ticker symbol PAX.
Paxos Standard was actually designed as an Ethereum token written according to the ERC-20 protocol so that anyone that has an Ethereum wallet is going to have the ability to send and receive it tokens.
The smart contract was audited by smart contract auditor Nomic Labs, and account balances are going to be reviewed by top U.S. auditors.
The co-founder and CEO of Paxos, in his post on the it blog, had several interesting things to say about the PAX token.
He said that every it token is fully backed by dollars which are held at U.S.-domiciled FDIC-insured banks. However, Paxos does not name these banks at all.
Reasons why to use Paxos Standard
There are two good reasons why to use PAX: The first one: Through itBitc, as well as some other exchanges where it is going to be available, traders can move digital assets into PAX while hedging against volatility, cheaper and faster than chasing out into dollars and crossing the digital-to-fiat divide. The second one: Through trading desks, for settling the cash side of any crypto trades instantaneously and 24/7.
Eventually, PAX could also be used to settle a transaction with any assets, not only assets which are digitally native, but also assets which are physical commodities or securities, such as stocks and bonds.
As it has been reported, in May, Paxos raised about $65 million from investors which include venture capital firms RRE Ventures and Liberty City Ventures. This cash injection was used to expand its operations.