Growing in Popularity
The world of blockchain has seen its fair share of stablecoins come and go. However, with recent levels of adoption, it would seem as though Paxos has managed to establish themselves as a mainstay.
They have done this through offering a variety of products. This includes not only their stablecoins, but through their settlement services. This article highlights a few of the recent events surrounding the adoption of these offerings.
Paxos Standard (PAX)
One of the most popular use cases for stablecoins are through lending platforms. Whether acting as collateral, or held in a high interest savings account, there is a clear demand.
PAX, in particular, just announced that market leading lending platform, BlockFi, has begun supporting their USD backed stablecoin. Much like other stablecoins on the BlockFi platform, those who opt to hold their PAX in a savings account will be rewarded with an 8.6% interest rate.
This new found support prompted commentary from representatives of each, BlockFi and Paxos.
Zac Prince, CEO of BlockFi, stated,
“We’re excited to support PAX on our platform and help expand stablecoin availability, with market leading yields, to BlockFi clients. As our respective platforms continue to grow, we expect to find more ways to collaborate.”
Walter Hessert, Corporate Strategy for Paxos, stated,
“Earning interest on assets is a key aspect of global finance. Having this opportunity in crypto is important to growing the overall marketplace and bringing maturity to this asset class. We’re pleased that PAX is now available on BlockFi and look forward to bringing stablecoins to more people around the world.”
For those interested in taking advantage of such high interest savings accounts, don’t worry about getting your hands on PAX, as it is quite easy. For example, Paxos notes that their popular stablecoin is available to purchase on over 100 different exchanges.
PAX Gold (PAXG)
While the concept behind PAX is similar to PAXG, there is one main difference. PAX is backed by USD, while PAXG is backed by physical gold.
Much like the former, PAXG has seen an uptick in adoption. This was most recently made apparent with the announcement that PAXG is available for trading through digital asset exchange, Smart Valor. As a result, by opening up the asset for trading on a popular exchange, holders of PAXG now gain access to higher levels of liquidity, and overall ease of access to PAXG.
Kyle Libra, Product Director at Paxos, stated,
“PAX Gold is a truly unique product – it is the fastest and easiest way to buy, own and trade the highest-quality physical gold. Given the volatile market environment, it’s important that investors around the world can access this safe haven asset quickly and easily – PAX Gold does just that. With Smart Valor, customers with GBP, EUR or Swiss Francs can now buy PAX Gold and trade that against the biggest cryptos.”
Olga Feldmeier, CEO of SMART VALOR, stated,
“The US dollar lost 93% of its value over the last 100 years. In a view of the recent decision by the US Federal Reserve to lower the benchmark interest rate to 0% and relaunch its quantitative easing program with $700 billion, the greenback is set for further devaluation. With the breakout of the coronavirus we also might be heading into the deep recession like the Great Depression of the 1930s. This is the time when investors are in dire need for a real alternative to protect their savings. Therefore, we decided to move forward with listing of tokenized gold on SMART VALOR exchange.”
The adoption of PAXG on a trading platform is not the only example of interest. Much like PAX, crypto-lending platforms are accepting this gold backed asset as a form of collateral. More specifically, PAXG is able to be used on, both, Nexo and SALT.
Paxos Settlement Service
While stablecoins may be their bread and butter, Paxos has been diligently developing ancillary services, as it looks to bring new efficiency to ‘legacy’ processes.
This can be seen through their, now live, settlement service. While development of this began years ago, the project only recently became a reality when Paxos was successfully awarded a ‘No-action letter’, by the SEC. This was, essentially, a statement made by the SEC that they would not take any enforcement action against Paxos upon launch of the service. This statement was released after the SEC evaluated their plan, and service capabilities.
Once receiving this news, in late 2019, Paxos wasted no time in going live. By early 2020 the company successfully went live with their first clients – Credit Suisse and Instinet Holdings. In our previous look at this settlement service, we touched on its main benefits.
- Access to Short Settlement Cycles
- Immediate Access to Settlement Proceeds
- Increased Data Accuracy and Visibility
- Security and Availability
At the time of launch, representatives from each, Paxos and Credit Suisse, commented.
Charles Cascarilla, CEO of Paxos, stated,
“Launching Paxos Settlement Service under No-Action relief is the first step in our journey to transform post-trade infrastructure in the securities industry. We’ve worked closely with Credit Suisse and Instinet to build a solution that can deliver long-term cost benefits and together we will refine the system in a live environment. Our upcoming application for clearing agency registration demonstrates our dedication to modernizing market structure on a large scale.”
Emmanuel Aidoo, Head of Digital Asset Markets at Credit Suisse, stated,
“The initiative has the potential to deliver great efficiency and cost savings to the post-trade cycle. Paxos Settlement Service introduces blockchain technology that’s compliant with regulations and allows us to take important strides towards evolving market structure and unlocking capital that is tied up in legacy settlement processes.”
Founded in 2012, Paxos maintains operations in New York City. Above all, the team behind Paxos strives to develop a variety of products which service varying markets. These range from Stablecoins, to post-trade activity, settlement capabilities, and more.
CEO, Charles Cascarilla, currently oversees company operations.
In Other News
Adoption by exchanges for the trading of, both, PAX and PAXG? Check. Adoption as collateral through lending platforms? Check. Adoption through eligibility for savings accounts? Check. Adoption of ancillary services surrounding trade securities settlement? Check.
It is fair to say that popular stablecoins may have a newly established rival.
Beyond products specific to Paxos, we have looked at Stablecoins as a group in the past. With their rise in popularity, we have seen potentially gimmicky concepts alongside high potential ones. The following article takes a look at a few of these.