Pax Dollar is a USD-backed stablecoin that aims to ease international transactions while removing the constraints of the traditional banking system. Since users must go through a complicated process when sending money internationally, most global financial institutions are eager to use blockchain systems for global transactions. Furthermore, financial institutions and local governments can easily access their transaction history.
However, most of them are concerned about price volatility. In this case, stablecoins allow them to benefit from the blockchain industry without worrying about their assets.
What Are Stablecoins?
Stablecoins are tokens backed by fiat currency, commodities, and other traditional assets. Other cryptocurrencies are even used to back some stablecoins. The primary goal of these tokens is to maintain a consistent price over time so that users can trade them globally or store them as digital assets in their wallets.
Their peg determines the value of these stablecoins to a fiat currency. Most of these coins are centralized since an organization issues tokens to users based on the amount placed in a reserve. Popular fiat-collateralized stablecoins include Tether, TrueUSD, USD Coin, Gemini Dollar, Paxos Standard Token, and Digix Gold.
These stablecoins are linked to another cryptocurrency. The stablecoin’s value is maintained by crypto tokens held in reserves. Makercoin and Havven are two of the most well-known examples of crypto-collateralized stablecoins.
Algorithmic non-collateralized stablecoins
Collateralized assets do not back these stablecoins, but their value is preserved through various algorithms. The initial guesses of algorithmic non-collateralized stablecoins are Basis, Fragments, and Kowala.
These stablecoins are created using a combination of the patterns discussed above. TerraUSD was an important example of a hybrid stablecoin because it had several characteristics of an algorithmic stablecoin and many BTC tokens stored for use as collateral. However, due to a variety of factors, this stablecoin recently crashed. Carbon is yet another hybrid stablecoin.
What is Pax Dollar (USDP)?
Pax Dollar is a fiat-collateralized stablecoin backed by the US dollar. Pax Dollar is unique because a corporation manages it with a charter issued by the New York State Department of Financial Services. As a result, it has the legal power to provide its services in the crypto world.
Users can trust this project, unlike Tether and USDC, because they can verify the overall holdings of this establishment through authentic sources. The Paxos company has established several accounts in US depository institutions, each of which holds an equal amount of US Dollars depending on the Pax Dollar issued by the company.
Pax Dollar History
Pax Dollar is an ERC-20 token that Paxos Standard launched in September 2018. The Pax Dollar was created by Rich Teo and Charles Cascarilla, co-founders of Paxos Standard. They hired former Silicon Valley and Wall Street employees to develop a payment system compatible with traditional payment methods.
Paxos is one of the first cryptocurrency businesses registered with the New York State Department of Financial Services. Paxos is currently working to build the public image of its stablecoin. However, the company aims to build an ecosystem where users can freely transfer securities, digital assets, and commodities across borders.
How Does Pax Dollar Work?
Pax Dollar is committed to becoming a trustworthy payment option for users looking to capitalize on the blockchain industry. Paxos Standard has several accounts with US depository institutions. Users must send US dollars to one of these accounts to receive the Pax Dollars.
Paxos Standard mints an equal number of Pax Dollars via a smart contract and transfers the tokens to the user. Users can learn more about the company’s account by visiting its official website. When a user requests redemption, the Pax dollars are burned, and the amount is returned to the user.
It’s worth noting that Paxos has a $100 minimum conversion limit. The intriguing part is that Paxos does not charge a fee for purchasing or redeeming Pax Dollars.
What Makes Pax Dollar Unique?
Pax Dollar has several advantages, making it a better option than other fiat-collateralized stablecoins.
Paxos is a New York State Department of Financial Services-registered company. As a result, it is unable to issue additional Pax Dollars.
Withum, a US auditing firm, audits all of Paxos’ bank accounts.
Instant purchases and redemption
The process of purchasing and redeeming Pax Dollars takes one business day.
Paxos has collaborated with several other surveillance and transaction monitoring teams to protect investors’ funds.
When purchasing and redeeming TUSD tokens, some fiat-collateralized stablecoins, such as TrueUSD, charge 1% of the total transaction amount. Furthermore, they have a $10,000 minimum withdrawal limit. Pax Dollar, on the other hand, has no such limitations. Users can purchase and redeem Pax Dollars without incurring any additional fees.
Pax Dollar Tokenomics
Pax Dollar is an ERC-20 token based on the Ethereum blockchain. Pax Dollar has a market cap of $942 million and a circulating supply of 945.6 million tokens. In terms of market capitalization, it’s ranked as the 52nd cryptocurrency. The circulating supply varies according to the company’s USD reserves.
Pax Dollar is a stablecoin backed by USD launched by Paxos Standard. It promotes cryptocurrency adoption while absorbing the cryptocurrency market’s price volatility. The fact that Paxos Standard is authorized by the New York State Department of Financial Services is a bonus. As a result, investors are confident in their investments. Don’t hesitate to contact us if you require additional information about how Pax Dollar works.