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Michael Nagle / Bloomberg
A new US dollar secured security regime has been approved by the most stringent regulatory regime for crypto.
New York's Financial Services Department, creator of BitLicense's controversial regulatory framework, released the Paxos Standard coin on Monday and will regulate the asset.
Developed by Paxos, the Ethereum-based stablecoin is designed to function as a liquid cash alternative that can be used for instant settlement in global financial transactions, while offering immutability and decentralized accounting functionality.
An ERC-20 token, Paxos Standard, will be issued by Paxos Trust Company and will be fully guaranteed at a ratio of one to one in dollars. Paxos Trust is incorporated in New York and serves as a trustee and qualified custodian of client funds.
Once an account has been opened, integrated and an electronic transfer of dollars has been received, the Paxos tokens are struck and can then be used as a means of settlement in financial transactions instead of dollars. Tokens are burned during the redemption, ensuring all outstanding tokens have the corresponding dollars on hold.
Dollar deposits converted into tokens will be held in US banks subject to the supervision and regulation of the Federal Deposit Insurance Corporation, providing insurance and coverage that is not available to other STABs currently on the market.
"Paxos Standard gives the financial markets the power to trade on a fully USD-backed asset with the benefits of blockchain technology and the monitoring of financial regulators," said Charles Cascarilla, CEO and co-founder of Paxos.
"We believe that Paxos Standard represents a significant step forward in digital assets, leveraging the surveillance and stability of the traditional financial system and enabling a frictionless global economy."
Cascarilla also pointed out to Forbes the dollar deposits for the token would be accepted by four US banking partners and the token would be regularly audited by a major auditor, although he refused to specifically identify the banks and auditors with whom Paxos will work.
"In today's marketplace, trust and volatility are the biggest obstacles to adopting digital assets," he added.
"As a regulated trust with a one to one dollar guarantee, we believe we offer an asset that enhances the value of money."
The NYDFS also approved Monday a similar file developed by Tyler and Cameron Winklevoss.
The coin, marketed under the name of PAXTM, will be immediately available on itBit, Paxos' crypto-exchange and digital asset guard service. It will also be available for the list of additional exchanges.
The company was founded in 2012 under the name of itBit, but was later renamed Paxos to focus more on blockchain services – specifically asset scanning to enable frictionless trading and lower settlement risk.
Since then, Paxos has incorporated a wealth of financial expertise into its orbit. Her board of directors now includes Sheila Bair, who was president of the Federal Deposit Insurance Corporation during the 2008 financial crisis; former US Senator Bill Bradley; Robert Herz, former chairman of the Financial Accounting Standards Board and Duncan Niederauer – former executive at Intercontinental Exchange and NYSE / Euronext.
In May, Paxos announced it raised $ 65 million from investors including Liberty City and RRE Ventures.
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A new US dollar secured security regime has been approved by the most stringent regulatory regime for crypto.
New York's Financial Services Department, creator of BitLicense's controversial regulatory framework, released the Paxos Standard coin on Monday and will regulate the asset.
Developed by Paxos, the Ethereum-based stablecoin is designed to function as a liquid cash alternative that can be used for instant settlement in global financial transactions, while offering immutability and decentralized accounting functionality.
An ERC-20 token, Paxos Standard, will be issued by Paxos Trust Company and will be fully guaranteed at a ratio of one to one in dollars. Paxos Trust is incorporated in New York and serves as a trustee and qualified custodian of client funds.
Once an account has been opened, integrated and an electronic transfer of dollars has been received, the Paxos tokens are struck and can then be used as a means of settlement in financial transactions instead of dollars. Tokens are burned during the redemption, ensuring all outstanding tokens have the corresponding dollars on hold.
Dollar deposits converted into tokens will be held in US banks subject to the supervision and regulation of the Federal Deposit Insurance Corporation, providing insurance and coverage that is not available to other STABs currently on the market.
"Paxos Standard gives the financial markets the power to trade on a fully USD-backed asset with the benefits of blockchain technology and the monitoring of financial regulators," said Charles Cascarilla, CEO and co-founder of Paxos.
"We believe that Paxos Standard represents a significant step forward in digital assets, leveraging the surveillance and stability of the traditional financial system and enabling a frictionless global economy."
Cascarilla also pointed out to Forbes the dollar deposits for the token would be accepted by four US banking partners and the token would be regularly audited by a major auditor, although he refused to specifically identify the banks and auditors with whom Paxos will work.
"In today's marketplace, trust and volatility are the biggest obstacles to adopting digital assets," he added.
"As a regulated trust with a one to one dollar guarantee, we believe we offer an asset that enhances the value of money."
The NYDFS also approved Monday a similar file developed by Tyler and Cameron Winklevoss.
The coin, marketed under the name of PAXTM, will be immediately available on itBit, Paxos' crypto-exchange and digital asset guard service. It will also be available for the list of additional exchanges.
The company was founded in 2012 under the name of itBit, but was later renamed Paxos to focus more on blockchain services – specifically asset scanning to enable frictionless trading and lower settlement risk.
Since then, Paxos has incorporated a wealth of financial expertise into its orbit. Her board of directors now includes Sheila Bair, who was president of the Federal Deposit Insurance Corporation during the 2008 financial crisis; former US Senator Bill Bradley; Robert Herz, former chairman of the Financial Accounting Standards Board and Duncan Niederauer – former executive at Intercontinental Exchange and NYSE / Euronext.
In May, Paxos announced it raised $ 65 million from investors including Liberty City and RRE Ventures.
