Paxos (PAX)

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Paxos
Paxos logo.png
Founded 2016
Headquarters New York City
Key People Charles Cascarilla, Founder and CEO; Andrew Chang, COO; Richmond Teo, CEO of Asia
Products Paxos Standard, a stablecoin; custody services
Twitter @PaxosGlobal
LinkedIn Profile
Website Paxos Home
Releases Company News

Also see John Lothian News's 2017 video interview with Charles Cascarilla, the founder of Paxos, which is available here.

Products and Services

PAX Stablecoin

Paxos Trust Company, the successor to itBit Trust Company, was licensed on September 10, 2018 by the New York State Department of Financial Services (NYDFS) to issue a stablecoin - that is, a virtual currency tied to the value of a fiat currency. The coin is called Paxos Standard (PAX) and is tradable on Paxos's cryptocurrency exchange, itBit,[1] as well as on 75 other cryptocurrency exchanges.[2] In mid May 2019, PAX was the 39th largest cryptocurrency by market capitalization according to CoinMarketCap, an online industry data reporting service.[3]

One PAX should have the value of one U.S. dollar, according to the Paxos website.[4] While Bitfinex, Tether and Tether's USDT were being investigated for criminal fraud by the Attorney General of New York, Paxos announced on May 13, 2019, that PAX could be redeemed instantly on the Paxos platform. Delays in redeeming their coins have been a persistent problem for stablecoin users.[5]

The company suffered headaches in late 2018 over its competitor, Gemini, when some traders took advantage of an arbitrage opportunity between Gemini dollars (GUSD) and Paxos' stable coin, PAX. Traders bought GUSD at a 2 percent discount and exchanged vast sums of it for PAX, and then opened accounts under relatives' names to bypass the $10k transaction limit on Huobi, another exchange. In order to redeem those coins for US dollars, they had to go through the original issuer - Paxos. The result was huge numbers of users wanting to cash out their new PAX coins.[6]

In a March 11, 2019, interview with Fortune's The Ledger, Cascarilla said that Paxos was planning on issuing a stablecoin backed by gold "definitely this year." He noted that Paxos's status as a trust company allowed it access to the banking system which would provide transparency and legal certainty around their holding gold. Cascarilla also told The Ledger that Paxos had applied to the U.S. Securities and Exchange Commission for permission to tokenize securities. He did not provide a launch date for that product.[7]

Huobi stablecoin (HUSD)

In July 2019, a digital asset startup called Stable Universal, which was backed by Huobi, launched a stablecoin called HUSD. The stablecoin is tradeable on the Huobi Global exchange as an alternative to Tether, according to a statement by Huobi.[8]

Binance USD (BUSD)

Paxos and the Malta-based exchange Binance announced on September 5, 2019, that Paxos would issue a New York State Department of Financial Services-approved U.S. dollar-backed stablecoin called Binance USD (BUSD). It is an ERC-20, Ethereum-based token. It will be issued and redeemable through the Paxos wallet in exchange for U.S. dollars or PAX stablecoins. Paxos will also serve as the custodian of the coin's fiat currency reserves. Initially, it will trade against bitcoin, Binance Coin (BNB) and Ripple (XRP) on Binance.[9]

Blockchain equities

In October 2019, Paxos announced that it would launch blockchain-settled, U.S.-listed equities after receiving a no-action letter from the SEC, which means the SEC will not take enforcement action against them. According to Charles Cascarilla, CEO and co-founder of Paxos, most of the equities listed by Paxos will be "generally liquid," large-cap, low-volatility stocks.[10]

History

In September 2016 Paxos rebranded itself from itBit, which survived the rebranding as a division of Paxos. Paxos was to leverage itBit's distributed ledger technologies.[11]

In December 2016, Paxos and Euroclear announced that they had completed a test of 600 gold bullion trades on Bankchain, a blockchain-based post-trade platform with a group of banks that included, among others, Scotiabank, Citibank and Societe Generale.[12] In late July 2017, however, Euroclear and Paxos announced the end of their pursuit of a joint precious metals settlement platform.[13] On May 17, 2018 the NYDFS licensed Paxos to offer Bankchain commercially.[14]

With a May 2018 Series B raise of $65 million, Paxos has raised a total of at least $93.3 million in funding.[15]

In November of 2019, the SEC gave the green light to a pilot project led by Paxos in which blockchain would be used to settle trades in stocks in a small subset of the U.S. market in the hope of constructing a faster and cheaper way to process stock trades.[16]


For additional information about Paxos, click on Marketswiki.gif to open a new tab with MarketsWiki.

References