Paxos Gets NY Regulatory Backing For “Paxos Standard” Stablecoin, a USD-based Crypto Token
Paxos Launches Dollar-backed Stablecoin
Earlier today, the Paxos blockchain startup announced that it will introduce a stablecoin with legal backing from the state of New York. The digital currency will be known as Paxos Standard and has already been approved and will be regulated by the New York Department of Financial Services. Moreover, the coin will have the backing of the US dollar. Paxos is recognized and legally approved by the Securities and Exchanges Commission as a custodian of consumer funds and assets.
Thrilled to announce that today we launched Paxos Standard token (PAX), the world’s first token issued directly by a regulated Trust company. PAX is fully collateralized 1:1 with USD in reserve bank accounts. Find out more here! https://t.co/aaYQThF4oW pic.twitter.com/d7wKxBM8Os
— Paxos (@PaxosGlobal) September 10, 2018
As a stablecoin, the primary role of the Paxos Standard token is providing liquidity to digital asset investors. As per Paxos, the coin is fundamentally a digital alternative to cash that can facilitate instant settlement of transactions. Concerning this matter, Charles Cascarilla, the CEO of Paxos, said that the stablecoin will enable the markets to trade using an asset collateralized by the US dollar and driven by distributed ledger technology. Cascarilla further lauded Paxos Standard as major development in the digital assets sector, saying that it would improve the utility of money and adoption of assets since it curbs the volatility associated with this asset class.
The Paxos Standard token runs on the ERC20 protocol on the Ethereum blockchain. Theoretically, the coin can be seamlessly transferred between two wallets on the Ethereum network. However, the accompanying press release stated that only accredited Paxos clients can buy or redeem the coin on its official website. To ensure that the coin remains valuable, redeemed tokens will be destroyed immediately, while circulating tokens will be backed by dollars in Paxos' reserves.
Lastly, investors who transact with Paxos' itBit crypto exchange or over-the-counter trading platform can instantly cash out their digital assets using Paxos Standard. Later on, the coin will be listed on third-party exchange platforms bearing PAX as its ticker symbol.