New Stablecoin Backed by New York Regulator to Be Released
On Monday, Paxos, a blockchain startup, announced that it will be issuing a stablecoin that will be backed by New York regulator.
The newly launched Paxos Standard, which has received approval and will be regulated by the New York Department of Financial Services (NYDFS), being backed by the value of the U.S. dollar, according to the company’s statement. Also, Paxos has already been regulated and approved by the U.S. Securities and Exchange Commission to hold the funds of its clients.
The Paxos Standard token was created to provide liquidity for throes that trade crypto asserts by acting as a “digital alternative to cash” that can instantly settle transactions, stated the company.
Charles Cascarilla, Paxos CEO and co-founder, said that the new stablecoin was designed to be used in financial markets by conducting transactions in place of a “fully USD-collateralized asset” which uses blockchain technology.
Describing the token as a “significant advancement in digital assets,” Cascarilla went on to say:
“In the current marketplace, the biggest hindrances to digital asset adoption is trust and volatility. As a regulated trust with a 1:1 dollar-collateralized stablecoin, we believe we are offering an asset that improves on the utility of money.”
The token is based on Ethereum’s ERC-20 standard and can be transferred between any two wallets on the Ethereum network, although only verified Paxos customers can buy or claim tokens on the company’s site. To keep the stablecoin valuable, tokens are burned when they are redeemed, while the tokens that are still on the market will be backed by dollars that the company owns.
Any traders that use Paxos’ itBit exchange or over-the-counter trading desk can instantly cash out their digital assets via Paxos Standard. The token will be supported by other exchanges, and it will have the ticker symbol PAX.
The company has been approved in the past by the NYDFS, and currently functions under a limited-purpose trust company agreement.