What is the Pax Dollar?

Technological innovations are rapidly transforming sectors globally.

The financial industry is one sector significantly impacted by technological advances.

Cryptocurrencies are slowly transforming the financial world as we know it.

Have you ever heard of the Pax dollar?

Key points

  • Pax Dollar is one of the three regulated stablecoins.
  • Thanks to the measures Paxos has put in place, it is safe to use.
  • Several factors distinguish Pax Crypto from other stablecoins.
  • Future changes will see Pax Dollar be used more in everyday transactions.

This article takes a deep dive into the Pax dollar. It looks at what it is, who owns it, whether it is safe, and how you can get it.

Let’s dig in.

What is Pax crypto?

PAX is Paxos Standard Token in full.

It is a flat-collateralized stablecoin that was founded in September 2018. Moreover, stablecoins are Cryptocurrencies created to minimize the stablecoin’s price volatility.

Pax Crypto was also designed to eliminate friction from cross-border transactions and offer a trustworthy payment medium for crypto assets.

Stablecoins can be pegged to cryptocurrency or fiat money. Occasionally, you can trade it for commodities. Pax Dollar allows users to transact with blockchain assets by reducing the price risk. The Pax Dollar tokens are usually issued as ERC-20 tokens on the Ethereum blockchain.

Furthermore, they are collateralized 1:1 Through the USD held in U.S. bank accounts owned by Paxos. It is also among the three stablecoins Wall Street regulators approve, together with BUSD and GUSD.

It is also expected that Pax Dollar will be used to make consumer payments and as a stable store of value for individuals outside the U.S.

The history of Pax crypto

As mentioned above, Pax was founded in 2018 by Paxos, a financial institution regulated in New York. It was announced publicly in 2018 and became the first virtual currency company with Gemini to be awarded a Trust charter by the New York State Department of Financial Services (NYDFS).

The charter allows Paxos to offer regulated services with virtual commodities and crypto-assets.

Paxos Standard was established to enhance the larger financial ecosystem by creating a flawless global network in which digital assets can be mobilized with enhanced speed, accessibility, and flexibility.

Pax crypto officially started trading on September 27th, 2018. Its goal is to establish a future where you can transfer securities, digital assets, and commodities anywhere at any time.

Initially, the crypto was known as Paxos Standard stablecoin, but the company changed its name to Pax Dollar. Therefore, users can identify it on a cryptocurrency exchange or explorer as USDP.

3D render spaceman with green helmet holding pax dollar in an office

What is the Pax dollar backed by?

The Pax Dollar is a stablecoin that enables users to exchange U.S. dollars for Pax Dollar Tokens. Its primary goal is to stabilize the dollar with blockchain technology.

The Paxos company received a charter from the New York State Department of Financial Services. This charter enables them to provide regulated services in the crypto asset world. Furthermore, the Pax Dollar is backed by the USD in accounts held by the company at the U.S. depository institutions.

This means that you can redeem Pax Dollar for USD at any time. But, as per U.S. Law, Paxos Dollar is not a security.  

Is Pax crypto safe?

The Pax Dollar network is secured. You can transact the Pax Dollar over the Ethereum blockchain just like Ether or other ERC-20 assets. If you want to redeem your Pax Dollar, you send tokens to an address that Paxos controls that destroys the tokens and transfers fiat currency to your bank account.

The existence of the Pax Dollar on a public blockchain enables traders and exchanges to use it as an alternative to fiat currencies. It also allows the public to outsource their banking needs to Paxos. Moreover, it makes it effortless to integrate Paxos with Ethereum-based applications.

In case of a security threat, Paxos pauses transfers and approvals of the Pax Dollar token. A single owner role like OpenZeppelin’s ownable controls the ability to pause controls. The model also follows OpenZeppelin’s Pausable.

The OpenZeppelin contracts use libraries of smart contracts for Ethereum and other blockchains to help reduce the risk. Because Paxos has a regulated trust, it can transfer assets and monies legally. Integrating that permission with blockchain technology makes Paxos transactions rapid, secure and less risky.     

How much is Pax worth?

At the time of writing, the live Pax Dollar price is $0.998344. This valuation is from a 24-hour trading volume of $4211675. It was a 0.35% drop within 24 hours.

Additionally, its current CoinMarketCap ranking is 49 and a live market cap of $943986975. It also has a circulating supply of 945642940 USDP coins.

The stablecoin can also increase in value, but some mechanisms help return the price back to the stable peg. This is because a stablecoin that’s working correctly is not supposed to increase in value.

Is Pax dollar a stablecoin?

Pax Dollar is a stablecoin. It has also built on its experience to develop stablecoin third-party protocols. For example, they advertise “stable-coin-as-a-service” to commercial banks, global businesses, payment processes, remittance companies and crypto exchanges.  

Furthermore, the Paxos Dollar tokens are different from other stablecoins because of the following factors:

  • New York’s State Department of Financial Services regulates Paxos.
  • It has guaranteed cash deposits meaning every collateralizing deposit is held at FDIC-insured U.S. banks.
  • U.S. auditing firm Withum audits all Paxos Dollar bank accounts.
  • Regarding security, Paxos uses additional transaction monitoring and surveillance partners, which add an extra layer of compliance.
  • It allows daily purchase and redemption windows. Tokenization and redemption requests are processed regularly to facilitate funds’ free and frequent movement. As a result, every operation is done within one business day.
  • You will not be charged any fees to issue or redeem Paxos standard tokens.

Who owns Pax coin?

Charles Cascarilla and Rich Teo are Pax Dollar’s founders. Moreover, Charles Cascarilla is Paxos’ CEO, co-founder, and founding board member of the Association for Digital Asset Markets (ADAM). Charles was also a partner at Liberty City Ventures.

Furthermore, he is the co-founder and partner at Cedar Hill Capital Partners. His past experience includes being a portfolio manager at Claiborne Capital Management, a financial analyst at Goldman Sachs and an analyst at the Bank of America.

On the other hand, Rich Teo is Paxos’ second founder. Initially, he was a principal/senior Analyst at Cedar Hill Capital Partners. He had a stint as a financial analyst at Citi and a combat signaler at the Singapore Armed Forces.  

How do I get Pax crypto?

You can buy and sell Pax Dollar or USDP on various exchanges such as:

  • Binance
  • Bithumb Global
  • Bittrex
  • Digifinex
  • 1inch Exchange
  • VCC Exchange

How does it work?

Users follow these steps when tokenizing USD to PAX:

  1. You send USD to the token issuer’s bank account.
  2. The issuer will use PAX smart contract to create the equivalent amount of PAX.
  3. It then delivers the PAX to you while the USD is held in the bank account.

You can use the same but reversed the process to redeem PAX for USD. Moreover, you can use Paxos.com to purchase and redeem Paxos Standard tokens. Once you redeem a token, it is burned and removed from circulation.  

Frequently Asked Questions

Is Pax Dollar a good investment?

First, Pax Dollar is a stablecoin, and its value generally remains $1 save for minor fluctuations. Additionally, USDP is usually used as an exchange rather than a medium of investment.

Will Pax Dollar’s value go up?

Pax Dollar being a stablecoin, its value typically remains at $1. Therefore, it is not necessary to predict the Pax Dollar price.

If a stablecoin works as it should, its price should remain stable.

Which blockchain network hosts Pax Dollar?

The Ethereum blockchain (ERC-20) hosts Pax Dollar.

How do you view your Pax Dollar on Paxos.com?

Paxos.com only displays a single USD balance which you can withdraw interchangeably as fiat currency or as USD-backed stablecoins. The exchange rate is usually on a 1:1 basis to external wallets that support ERC-20 tokens.

Is Pax Dollar regulated?

Yes, the New York State Department of Financial Services regulates Pax Dollar. Paxos Trust Company issues Pax Dollar while the U.S. Treasury issues USD.

Final Thoughts

Pax Dollar has revolutionized the cryptocurrency world.

It is part of the stablecoins, which addresses the volatility of Cryptocurrencies. For example, its value is stable; it facilitates cross-border transactions and makes it possible for users to transact with it for goods and services.

As more developments trickle in, Pax Dollar users should expect to see more.

Further Reading: What is YEM or Rainbow currency?

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