Backed 1:1 by the dollar, the Ethereum blockchain-based stablecoin, dubbed ‘Paxos Standard,’ has been approved by the New York State Department of Financial Services (NYDFS), which will exercise regulatory oversight over the asset’s issuance and trading.
Paxos itself is a Trust company and is positions itself as “a fiduciary and qualified custodian of customer funds,” pitching its new coin as offering “greater protections” for customer assets than its competitors.
According to today’s press release, investors’ dollar deposits will be held “in segregated accounts at multiple FDIC-insured U.S.-domiciled banks”. Moreover, the press release explains:
“When Paxos Standard tokens are in circulation, the corresponding dollars are held in reserve. Upon redemption for dollars, Paxos Standard tokens are immediately destroyed. Tokens are only in circulation when the corresponding dollars are in custody.”
Paxos co-founder and CEO Charles Cascarilla says he believes the new asset “improves on the utility of money" by fusing the stability and robust regulatory oversight of traditional fiat currencies with crypto’s promise to create frictionless flows of digital value.
According to the press release, investors using the itBit exchange or OTC desk will be able to redeem their crypto holdings for Paxos Standard “instantaneously.” The stablecoin is reportedly seeking to be listed on other marketplaces, and will trade under the ticker symbol PAX.
Today also saw the launch of the Winklevoss Twins’ own New York regulator-approved U.S. dollar-backed stablecoin, dubbed Gemini dollar. Both projects tally remarkably closely in their details – the Gemini dollar is issued by a trust company, approved by NYDFS, backed 1:1 by the dollar, and ECR-20 compatible. The twins have similarly pitched their aim as being the fusion of open, 24/7, decentralized digital currency flows with the “trust and regulation” of the traditional financial sector.
Both Paxos and Gemini claim their coins are a “world first” for regulated cryptoassets.