Paxos Standard (PAX) stablecoin launched barely a month ago and $50 million-worth of the USD-backed crypto has been issued so far according to the company’s Vice President of marketing and communications, Dorothy Jean Chang. Chang made the announcement through her twitter handle on October 15.
Regulated and USD-backed
The company’s stablecoin is regulated by the New York State Department of Financial services (NYDFS) as per a regulatory agreement signed early in September. The coin is therefore approved and backed by industry’s regulators making it ‘safe’ to trade in.
According to a press release during the launch of the US dollar-pegged cryptos, the company explains that, “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.”
As at September 28, Paxos “held about $14 million, backing the roughly 14 million PAX it had issued” according to Withum, an independent auditing firm that monitors the firm’s US dollar reserve monthly.
Stablecoin’s souring demand
It could be argued that the stablecoin’s demand is souring probably because of it is “regulated” compared to other cryptos. However, according to Paxos officials, the coin has been listed in over 20 cryptocurrencies exchange platforms including Binance and OKEx with others expected to follow. These rapid listings have fueled the stablecoin’s demand even further.
At this rate of token issuance, the stablecoin is likely to have ““achieved the fastest, widest institutional adoption of any digital asset.”
While Paxos celebrate the milestone, another US dollar-backed token Tether (USDT) was trading way below its range. Players in the market speculate that Tether’s extremely poor performance is associated with loss of market trust and banking complications.
Tether also had a massive issuance of its US dollar pegged coins just like it is happening with Paxos’ coin that it drew discussions on its possible influence on Bitcoin’s price performance. It will however, be wise for Paxos to study Tether’s downfall and stipulate measures to avoid the same pitfall.