Right on the heels of the Winklevoss twins’ enterprise announcement that Gemini will be matching cryptocurrency and fiat finances dollar-for-dollar with its new stablecoin, New York-based Paxos joins the realm of federally regulated crypto assets.
Introducing Paxos Standard
With approval from the New York State Department of Financial Services, Paxos has been greenlit to launch its new stablecoin, Paxos Standard (PAX), which will be used to liquidate cryptocurrency assets for instant transaction approval. Paxos, like Gemini, is a trust company; however, Paxos claims to be more technologically secure than any other stablecoin, such as GUSD. Both are fiduciary account holders qualified for disseminating funds, which is where competition finds its weak spot.
Unlike Gemini, the latter offers no fees as part of its infrastructure, but Gemini has two custody solutions for digital assets. By default, depository accounts are commingled and stored in Gemini’s Cold Storage System. Institutions working with Gemini are encouraged to apply for segregated custody accounts because such accounts (hedge funds, mutual funds, exchange trades, etc.) are typically required by law to be stored with a licensed custodian. Segregated accounts at Gemini come with annual fees of .09642 percent–a minimum of $100,000 per year and a liquidation rate of about two business days.
Paxos CEO and co-founder Charles Cascarilla said PAX gives financial markets more power with fully collateralized assets, blockchain security and regulation input, adding that the four-letter-word of cryptocurrency, “volatility,” is removed from the narrative.
In a statement, Cascarilla said:
“We believe that Paxos Standard represents a significant advancement in digital assets, leveraging the oversight and stability of the traditional financial system and enabling a frictionless global economy.”
Furthermore, trading is done via itBit, a custody service that also works in OTC exchanges. Tokens are par with Ethereum’s ERC20 protocol and are destroyed instantly upon redemption.
As for which company the spirit award for incentives will be given to, PAX is offering early applicants limited free trading options and $75 to get started.
Cover Photo by Ed Shelley on Unsplash
Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.