Paxos Launches Automatic Conversions between Bank Deposits and Stablecoins
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Paxos Standard overall health is on the rise, up 34-points since the end of January, as the team ramped up development for the release of its auto-transfers between bank deposits and stablecoins.
What is PAX?
Paxos Standard (PAX) is a regulated stablecoin that was first issued by the New York based blockchain company, Paxos, in September of 2018. It was issued as an ERC-20 token on the Ethereum Blockchain and is backed by funds held in FDIC insured, US domiciled banks.
The Paxos Standard Token is now the 4th largest stablecoin with a market cap of $216M and trading volumes of ~$350M daily. It is listed on over 100 exchanges, wallets and OTC desks and has grown in popularity among traders due to its immediate settlement and verified reserves.
Wire Me Some PAX
PAX FCAS is up 34-points (4.55%) since late-January when Paxos announced a new feature allowing customers to automatically wire transfer funds from their U.S. bank accounts into either Paxos Standard or Binance USD stablecoins. Conversely, any PAX or BUSD sent to the designated address will be automatically wired back to the individual’s bank account in USD. The goal is to increase the inflow of dollars on the Ethereum blockchain.
The team highlights the practicality of this new automated feature for weekly, recurring deposits of USD: for traders who need stablecoins on a weekly basis, or merchants who accept payment in stablecoins for instance. The team is actively making these transfers faster, “within minutes for requests below a certain USD threshold”, which explains the 12.32% increase in Developer Behavior we’re seeing.
Our Hot Take
Stablecoins provide the standard benefits of cryptocurrency without the volatility of price. This makes them extremely useful for users who wish to switch between a volatile cryptocurrency or fiat currency, and a more stable asset.
Regulations in the U.S. however may deem stablecoins as evidence of debt that is put in circulation as money, forcing the issuer to be licensed as a bank or trust company under NYBL. Paxos (formerly known as itBit Trust Company LLC) is well positioned in this regard because it is licensed as a limited purpose trust company under NYBL, distinguishing itself within the blockchain industry as a trustworthy issuer.
“We’re really a technology firm at heart, and so we’re trying to give you the confidence of a bank, but the innovation of Silicon Valley,” Paxos CEO Charles Cascarilla says.
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