96% of PAX and BUSD Reserves in Cash & Cash Equivalents, Reports Custodian

96% of PAX and BUSD Reserves in Cash & Cash Equivalents, Reports Custodian

Paxos also blasted Tether (USDT) and Circle (USDC) for claiming themselves to be regulated while having 75.85% and 61% in cash and cash equivalents that are “backed substantially by corporate debt obligations.”

After USDC disclosed its reserves backing this week, Paxos has released the composition of the reserves of its stablecoins, PAX and BUSD.

Paxos, PayPal’s broker-dealer, is the custodian for both PAX and Binance’s stablecoin BUSD. As of June 30, 96% of their reserves have been cash and cash equivalents, with the remaining 4% in US Treasury bills maturing in October.

Here, cash includes cash balances held in USD at insured depository institutions and

Cash equivalents are short-term, highly liquid investments with maturities of 3 months or less.

In its disclosure, Paxos Chief Compliance Officer Dan Burstein shared his displeasure and exasperation with the leading stablecoins USDT and USDC claiming to be regulated.

“Neither USDC nor Tether is a regulated digital asset, for the simple reason that neither token has a regulator. In fact, neither USDC nor Tether tokens are ‘stablecoins’ in anything other than name. These tokens are backed by illiquid and risky debt obligations – a critical weakness that no prudential regulator would allow to exist as this creates undue risk for their customers.”

USDT is the leading stablecoin with a market cap of $62.4 billion, capturing 58% of the market share, while USDC has a 24.3% market share with nearly a $27 billion market cap.

PAX has a market cap of $907 million, while BUSD accounts for a 10.8% market share with an $11.37 billion supply.

According to Burstein, only Paxos Standard (“PAX”), Binance Dollar (“BUSD”), and Gemini Dollar (“GUSD”) are regulated dollar-backed stablecoins by the New York State Department of Financial Services (“NYDFS”).

He further argued that USDC and Tether’s reserves are backed substantially by corporate debt obligations, which means customers are not protected due to illiquidity risk, credit risk, and interest rate risk.

In the case of USDC, he said, reserves are held on its issuer Circle’s balance sheet meaning, they can use consumer funds to pursue risky high-yield investments for its financial gain.

“The principal value of regulatory oversight is to ensure that the reserves consist of real, liquid, accessible dollars — if neither USDC nor Tether can fulfill these promises, can they even be considered dollar-backed stablecoins?”

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Author: AnTy

Bank of America to Speed Up Stock Trade Settlement Using Paxos Blockchain Network

Bank of America to Speed Up Stock Trade Settlement Using Paxos Blockchain Network

Crypto firm Paxos has welcomed Bank Of America to its blockchain-based network for settling US equities.

According to Bloomberg, Bank of America has become the latest US bank to join the Paxos Network for blockchain stock settlement. The Paxos network facilitates the quick settlement of securities.

European banking giant Credit Suisse and Nomura Holdings Inc’s Instinet already use the network known as Paxos Settlement Service.

Improving Return-on-Assets for BoA

Speaking on the new development, the Bank of America’s head of financing and clearing, Kevin McCarthy, said joining the Paxos network would help improve the return-on-assets in the business, which he said has been a challenge for the bank.

Paxos Settlement Service is an alternative settlement platform to existing market infrastructure. It was launched in 2020 after receiving a no-action relief from the US Securities and Exchange Commission (SEC) in October 2019. Paxos has also applied for a clearing license with the SEC.

The CEO of Paxos, Chad Cascarilla, said his platform could threaten the Depository Trust & Clearing Corp. (DTCC), which currently dominates equity settlement. The DTCC offers a “T+2” settlement process via legacy software. The DTCC settlement takes up to two days and only offers same-day settlement for trades are recorded on or before 11 a.m.

This is unlike Paxos that settles stock trades within minutes using the blockchain. Paxos runs a permissioned version of the Ethereum blockchain.

Using Blockchain In The Stock Market

In recent times, financial firms worldwide have begun to explore how blockchain can help address inefficiencies in the financial markets. Even as the total value of stocks traded globally is pegged to be around $77.5 trillion, the complexity in stock-related transactions persists. The stock market still has problems regarding the time it takes for transactions to be approved and the operational costs.

NASDAQ is one stock exchange that has been a front-runner when it comes to adopting blockchain. The exchange already uses blockchain technology to issue and manage private securities. Most of the other exchanges are still exploring prototypes and looking into the opportunities in blockchain technology.

Banks like JP Morgan Chase have also leveraged blockchain technology to develop specialized payments systems and offer niche banking products. Since last year, JPMorgan has used the blockchain to execute intraday repurchase agreements totaling billions of dollars.

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Author: Jimmy Aki

Blockchain Company Paxos Closes New Funding Round Worth $300 Million

Blockchain Company Paxos Closes New Funding Round Worth $300 Million

Paxos, a blockchain startup with PayPal Holdings as a client, announced the recent conclusion of a Series D fundraising round.

According to company CEO Charles Cascarilla, the funding session led by growth equity investment firm Oak HC/FT saw $300 million infused into the New York-based firm.

Other investors include PayPal ventures, Declaration Partners, Mithril Capital, and others.

Paxos Valued At $2.4 Billion Following Latest Investment

The crypto company is now worth $2.4 billion, per an official release.

According to Paxos, the new funds will be used to accelerate the growth of its financial market infrastructure platform. Paxos would also use the additional funding to ramp up recruitment across major departments.

Also, additional liquidity would be added to the platform to improve their customer experience and increase the use of their on-chain tokens.

Cascarilla said that demand for Paxos’ enterprise solution had grown exponentially in the past year in speaking with the funding round.

He ties this down to the company’s approach in providing the most innovative and regulated enterprise solutions to aid the development of a digital economy.

Following this new funding round, Paxos plans to establish a National Trust Bank after it secured a preliminary charter from the Office of the Comptroller of Currency (OCC) in the past week. With the approval, Paxos becomes the third federally chartered financial institution to become a crypto custodian following in the footsteps of Anchorage and Protego.

The company has also applied for a Clearing Agency Registration with the Securities and Exchange Commission and eyeing a Major Payment Institution license with Singaporean regulatory authorities.

Cascarilla notes that this latest funding round is more of a “confidence capital,” noting that investors believe in their ability to scale the business for the next decade.

Paxos went mainstream following its partnership with payment giant PayPal back in 2020.

The agreement saw the blockchain company powering PayPal’s crypto trading service.

Owing to the success of this deal and PayPal’s desire to explore the larger crypto market, Paxos has also been tapped by the Silicon Valley firm to help its Venmo app offer crypto services.

The Larger Crypto Market Growing

Cryptocurrencies have experienced exponential growth, all thanks to the pandemic-induced lockdowns, which have seen more people rely on online payments.

Realizing the potential benefits crypto can bring to the financial space, institutional investors have flooded into the crypto space, making the once-disregarded sector suddenly significant.

And this acknowledgment was seen when Coinbase went public on April 14 with a projected $100 billion valuation. This milestone has seen many experts forecast a litany of crypto public listings.

One of these experts is Ripple’s CEO Brad Garlinghouse, who reportedly said that more initial public offerings (IPO) should be expected in the blockchain space in the next 12 months.

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Author: Jimmy Aki

PayPal Partner Paxos Obtains Federal Bank Charter from OCC

PayPal Partner Paxos Obtains Federal Bank Charter from OCC

Paxos is the latest company to obtain preliminary conditional approval from the U.S. Office of the Comptroller of the Currency (OCC) to establish a de novo National Trust Bank.

This is the third such charter issued by the OCC, the top banking regulator, to a crypto native company. Previously Visa-backed custody firm Anchorage and trading and lending firm Protego received the first federal bank charter earlier this year.

It was under the leadership of Brian Brooks, who is now set to become the new CEO of Binance.US, that the OCC took several crypto-forward decisions, including banks now allowed to provide crypto services and use stablecoins to facilitate payment activities.

Paxos is the one powering the payment giant PayPal’s crypto service that enables its US users to buy, hold, and sell cryptocurrencies directly from their PayPal digital wallet. Now, PayPal-owned Venmo as well.

Besides its crypto brokerage service, Paxos also has its own stablecoin PAX. Along with its very own Paxos Standard (PAX), through its partnership with crypto exchange Binance and Huobi, Paxos custodies all the dollar reserves backing each unit of BUSD and HUSD stablecoins.

By obtaining this charter, Paxos becomes the first crypto-native company to receive preliminary conditional approval for a de novo national Trust Bank charter. It will also retain its NYDFS-regulated Trust company and reads the official announcement.

In December last year, the company shared that they are seeking a National Trust Bank Charter.

Paxos is now both a nationally and state-regulated bank.

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Author: AnTy

Binance Lists Paxos Gold (PAXG) Stablecoin For Trading Against BUSD, BNB, BTC

Binance, one of the leading crypto exchanges in the world, has decided to list gold-backed cryptocurrency by Paxos called Paxos Gold (PAXG). The gold-backed token will be listed against three other digital assets, including the exchange’s native stablecoin called BUSD, the native token Binance Coin, and Bitcoin.

Rich Teo, Paxos co-founder, and CEO Asia believe the listing on Binance would offer traders exposure to real regulated gold. He said:

“PAX Gold will offer [its] users an easy and safe opportunity to gain exposure to real, regulated gold.”

Paxos is a New-York based exchange that launched its gold-backed token Paxos Gold last September and is built on top of the Ethereum blockchain. Each PAXG token represents an ounce of the physical gold currently stored in the Brink’s London vault. Traders can buy as little as $1 worth of gold.

The listing of PAXG token on Binance came just weeks after Gold prices soared to all-time-highs amid global economic uncertainty. Gold has been a haven asset for centuries, and despite Bitcoin maximalists trying to prove Bitcoin is a better alternative, a majority of the population still sees gold as the true safe-haven asset Paxos Gold token has also been cleared for listing by the New York Department of Financial Services (NYDFS).

Apart from the approval from the NYDFS, CF Benchmarks has also launched a price index against the US Dollar, which would be real-time and offer daily settlement and spot rate, which would be updated every second.

Changpeng Zhao, CEO of Binance, also commented on their decision to add Paxos Gold and noted the importance of gold as an asset class. He said:

“Gold is an asset that has had enduring value from generation to generation. With PAX Gold now on Binance, investors can easily get and trade gold with the click of a button.”

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Author: James W

Revolut’s Partnership with Paxos Allows its US Users to Buy, Sell, & Hold BTC & ETH in 49 States

Revolut now allows its US users to trade cryptocurrencies by partnering with Paxos. This was made possible by New York-based Paxos getting a new brokerage service to let merchants offer crypto trading services.

Revolut US, the American division of the online bank, is the first client of Paxos. Paxos CEO Chad Cascarilla compared its new brokerage with a “plug-and-play” service that can be used by any company from payment firms to retailers to offer crypto to their customers with Paxos on the backend.

“It’s clear many firms want to offer crypto but are finding it’s difficult to build the regulatory and technological infrastructure to do that,” he told Fortune. “This allows anyone, no matter what type of firm they are, to do that.”

Paxos is a legal trust company, which means it retains all the assets it holds on its customers’ behalf, which allows it to deal with traditional financial firms that have to otherwise keep away from digital assets because of regulation or another risk.

Paxos currently offers a fiat-pegged stablecoin Paxos Standard and a crypto token backed by physical gold.

More Options for US Customers

Just a few months back, in late March 2020, Revolut launched its app and service in the US. Its partnership with the Metropolitan Commercial Bank enabled the company to offer its debit card to US customers.

Now, the European fintech allows its US users to buy, hold, and sell Bitcoin (BTC) and Ethereum (ETH) from the Revolut app, but you can’t send and receive crypto from third-party wallets. The feature is available in 49 states due to some regulator issues in Tennessee.

For now, only the top two cryptos are available, unlike its European counterpart, where it offers more cryptos such as XRP, Litecoin (LTC), and Bitcoin Cash (BCH). The company is working on adding more cryptos to the list.

For the first 30 days, Revolut is waiving the fees, which usually is 2.5% for a free Revolut account while Premium and Metal subscription will pay 1.5% in conversion fees. There are some monthly limits on currency exchange for free user users, which means you have to pay a 0.5% fee above that limit.

Square’s Cash App and commission-free Robinhood also let US users buy cryptocurrency via their apps.

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Author: AnTy

PAX Stablecoin Issuer Paxos Settles First US Equity Trade Using Blockchain

The first blockchain-based settlement of US equities was claimed by Paxos, the New York-regulated cryptocurrency startup, Instinet, the broker dealer owned by Nomura, and Credit Suisse.

The announcement that the Paxos Settlement Service is live has been made on Wednesday. This service allows the simultaneous exchange between cash and some of the Paxos’ Ethereum US-listed equities. The Paxos Trust Company made last year the announcement about the pilot that involves Société Générale and Credit Suisse being given the approval of the US Securities and Exchange Commission (SEC).

US Equities Settling Automatically in an Outside System

At the moment, the pilot stage may be running for 24 months and allow only 7 participants to handle 100,000 trades per day. Melayna Ingram, who is a Director Securities Product at Paxos said Société Générale should be integrated and go live until this quarter ends. Ever since the Depository Trust and Clearing Corporation (DTCC) has been formed, it’s the first time for US equities to settle automatically in an outside system.

As Ingram mentioned, most of the US equities innovations from the past 20 years have been in trading market venues and trade execution. Here are her exact words about what’s going on at Paxos:

“The back office has largely stayed the same, running on mainframe codebases and involving a complex system of reconciliation which is out of step with new technology.”

Paxos Will Apply to Be Fully Registered with the SEC

Paxos said it’s looking forward to apply this year with the SEC in order to become a registered clearing agency. At the moment, such licenses are given to only 7 US companies. Paxos doesn’t use an enterprise Ethereum client such as Besu, Quorum or BlockApps. Instead, it uses a private blockchain Ethereum code-based network.

Trying to explain the Paxos Settlement Service, the Credit Suisse’s head of digital asset markets Emmanuel Aidoo said:

“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.”

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Author: Oana Ularu

Paxos Adds Auto-Conversion, Directly Swap Fiat To PAX or Binance USD (BUSD) Stablecoins

On Tuesday, Paxos announced the launching of a fresh feature which will enable customers to instantly wire transfer money from different deposit bank accounts directly to Paxos Standard as well as Binance USD. In reverse, BUSDor PAX received by the given Ethereum address will instantly be sent back to the client’s bank account in the form of USD, CoinDesk reports.

Paxos senior product manager, Zack Kwartler, explained that the new feature will be known as Auto-Transfers and will be available in all banks within the US. He explained that there is a need for blockchain-based financial solutions to be closer to the real financial world and Paxos is using this new feature to bring more dollars to the world of blockchain.

Kwartler also explained that Paxos want to change the narrative that stablecoins can only be used for crypto trading and show that they can help in payments as well.

Paxos has been aggressive in the introduction of new services and products in the market in the last few months. Last week, the firm introduced tokenized gold futures dubbed PAX Gold which is currently available on FTX exchange. Additionally, the firm was awarded a no-action license by SEC to enable it settle Equities products through a private blockchain.

The new feature will make it easy for traders to trade on both the PAXD and BUSD as well as open up the payment systems to the two stablecoins. It will now be easier for users to pay using the two stablecoins.

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Author: Joseph Kibe

Paxos Gold Opens Up for Trading on HitBTC and Bithumb Exchanges, Holders Can Earn Interest

The New York-based crypto exchange Paxos has recently revealed that its gold-backed asset Paxos Gold will be listed in two additional exchanges. According to the company, HitBTC and Bithumb will receive the token. Also, holders will be able to redeem their tokens for physical gold if they wish to.

All Paxos tokens are backed with gold bars, so people basically own the gold already when they own a digital token. This option, however, would make it easier to use these products as people could redeem as much gold as they wanted, which would increase the versatility of the asset. According to the company, every 430 PAXG tokens can be redeemed for a gold bar.

The gold is fully audited and verified periodically, which improves the security of the asset. There is also a way to gain interest on holdings via third-parties, the company affirmed. By using the holding services of Celsius, Genesis Lending or Nexo, people can get more money from their tokens.

PAXG To Hit Two New Exchanges

The most important part of the announcement is that HitBTC and Bithumb Global will list the asset. It was even hinted that other exchanges could also jump on board, but no other names were announced at this point.

This is part of Paxos’ strategy to popularize digital holdings of gold and to increase its customer base. The company is focused on the creation of ways that people can basically participate in the industry without having to participate in all the bureaucratic parts that may complicate their lives.

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Author: Gabriel Machado

Paxos Launches PAX Gold (PAXG), A Gold-Backed Crypto Asset Based on Ethereum Blockchain

Paxos, a famous stablecoin operator, has recently decided to launch its newest asset: PAX Gold (PAXG). This Ethereum-based token is set to be launched soon and it will be the first cryptocurrency to be fully backed by gold.

According to the New York State Department of Financial Services (NYDFS), this will also be the first gold-backed crypto to be officially present in the New York state, which is a huge victory for the company.

Each token will be backed with a single fine troy ounce of gold from London Good Delivery. The institution will store all the gold in London, too. The idea is that the tokens will represent an easy way to move the gold around with fewer costs and more advantages.

In order to keep the value of the gold constant, fees will be charged upon creation, destruction and transaction of the token. According to Paxos CEO Charles Cascarilla, owning physical gold is very cumbersome and not really worth it when you have some other solutions. What the company wants now is to be the provider of these solutions.

It is easy, according to the CEO, to use exchange-traded funds (ETFs) and futures for exchanges, but they are not really legal ownership of the assets, so they are also not as good as actually holding it via cryptocurrencies.

Each token can be transacted by actual gold or fiat currency when redeemed with the company. Each user can also look up the information about the gold that is being held in storage, too.

In related news, Paxos has recently started a partnership with Binance in order to launch a new stablecoin for the company. The new token is set to be called Binance USD (BUSD) and will become the official stablecoin of the famous exchange.

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Author: Gabriel Machado