Pax Dollar (USDP) is a stablecoin and calls itself “the world's first regulated crypto asset.” The Pax Dollar is issued by the Paxos Trust Company and is fully collateralized by the US dollar at a 1:1 ratio. The dollar reserves are held in segregated accounts at multiple FDIC-insured banks located throughout the United States. Pax Dollar was formerly known as Paxos Standard Stablecoin (PAX).
Paxos was co-founded by Charles Cascarilla (CEO) and Rich Teo (CEO of itBit Asia) in 2012. Before Paxos, Cascarilla spent 15 years working in traditional finance as a financial analyst, portfolio manager, and partner at venture funds and institutional asset management funds. Similarly to Cascarilla, Teo worked in traditional finance as a financial analyst and senior analyst before cofounding Paxos.
In 2012, Paxos launched a cryptocurrency exchange called itBit. Three years later (May 2015), the New York State Department of Financial Services (NYSDFS) granted Paxos a trust company charter that established Paxos as the first regulated financial institution to offer crypto products and services in America. In September of 2018, Paxos launched the Paxos Standard stablecoin on the Ethereum blockchain following the ERC-20 token standard. Anyone with an Ethereum wallet can send and receive Paxos Standard tokens. In August of 2021 the Paxos Standard Stablecoin was renamed to the Pax Dollar and the ticker symbol was changed from PAX to USDP.
As a Trust company, Paxos is a fiduciary and qualified custodian of customer funds which means they have a legal obligation to act in the best interest of their users. The dollar deposits, which are held in segregated accounts at multiple U.S.-domiciled banks, are audited by Withum, a nationally top-ranking auditing firm. Withum independently verifies that the entire supply of Paxos Standard tokens is consistent with the US dollars in the reserve accounts managed by Paxos. Withum generates monthly attestation reports which are published on the Paxos website.
The Paxos Standard smart contract has been audited by smart contract auditors Nomic Labs (no relationship with Nomics.com) and ChainSecurity.
In addition to its function as a stablecoin, PAX also functions as a utility token giving itBit exchange users the ability to withdraw other crypto assets (e.g. Bitcoin) to PAX immediately and without fees.
When Pax Dollar tokens are in circulation, the corresponding dollars are held in reserve. When USDP is redeemed for US dollars, Pax Dollar tokens are immediately destroyed via the smart contract. Tokens are only in circulation when the corresponding US dollars are in custody.Read More