Despite the rising contention against stable coins, Paxos Standard has decided to ensure that it's backed by the U.S. dollar. New York-based blockchain infrastructure company Paxos has rebranded its token Paxos Standard (PAX) to Pax Dollar (USDP). As a regulated trust, Paxos has been set on providing financial services to the "bankless." Here's why the company has renamed its token.
There has been a surge of companies, institutions, and investors entering the uncharted territory of an open and "free" economy. Paxos wants to position itself among the frontrunners to ensure safe, regulated, and accessible financial services.
Pax Dollar (USDP) ensures a safe dollar-based solution.
The demand for a regulated USD stable coin has increased dramatically since pressure has been placed on their use cases. As the name suggests, stable coins don't have the same volatility as most cryptocurrencies. Stable coins are designed to maintain a 1-to-1 ratio to a nation's currency—like the U.S. dollar.
Currently, the issues with most stable coins like Tether (USDT) are the mechanics of how that peg should work. As the world's first digital coin issued by a regulated company, Paxos has boasted the safety of the stable coin. The company created reserves that are comprised of U.S. dollars or short-term Treasury bills. In contrast, Tether stores a large portion of its reserves in commercial paper and other assets.
Paxos wanted a distinguishable ticker (USDP) to compete with other stable coins.
With stable coins like USDC, backed by both Coinbase and Circle, and the controversial, but popular Tether, dominating the market, Paxos needed to ensure that users fully understood the value of its token. For this reason, Paxos decided on the name Pax Dollar (USDP). Investors can be comforted knowing that it's regulated and redeemable for 1-to-1 U.S. dollars.
Committed to regulation and full transparency, Paxos is focused on its stable coin operations. The company said that licensing and registration aren't the same as regulation. Perhaps the comment is a slight jab to both USDC and Tether since they're predominately backed by a significant amount of non-cash financial instruments.
Staying true to its mission, Pax Dollar aims to be the safest and easiest way for the unbanked to participate in the digital economy. With this name change, USDP will make it obvious to anyone what it's worth. Paxos is committed to ensuring that its value always equals a dollar.
"Stablecoins are the gateway to an open, digital financial system."
Regardless of the controversy, uncertainty, and reputation cryptocurrencies might evoke, Paxos understands that blockchain technology has enormous potential to transform the global economy. Even though most of humanity has access to internet connection or a smartphone, nearly 2 billion people remain bankless. USDP has the potential of changing this and making stable coins more pervasive than ever before.
Paxos said, "USDP is the regulated, safe digital dollar that can bring billions to financial freedom."