Paxos: Next-Gen Physical & Digital Assets Infrastructure

What Is Paxos? Stablecoins as a Service

Large corporations around the world use Paxos’ Stablecoin-as-a-Service offering, which lets companies create their own branded U.S. dollar-backed stablecoins for a wide range of use cases. Paxos stablecoins help commercial banks offer real-time account settlement to their customers, and large payment processors use Paxos stablecoins to accept and settle customer payments with minimal costs. Further, the Paxos stablecoin model enables U.S. customers to deposit their fiat money with high degrees of trust and simplicity, even without using a bank.

On top of all these services, Paxos helps facilitate crypto trading and fiat on-ramps for crypto exchanges, and with Paxos’ whitelabeled technology, an exchange can create stablecoins with its own brand name. Finally, Paxos enables fast cross-border remittance services for remittance-focused enterprises around the world. Paxos allows users to hold digital versions of fiat currency (on a 1:1 ratio) as a long-term store of value while mitigating the risks of seizure, theft, or hyperinflation that can occur through centralized banks in countries with unstable political and economic situations.

Paxos Crypto Brokerage Services

Paxos’ crypto brokerage service is a turnkey whitelabel solution, which means that it can sell a customizable brokerage system to an institutional buyer as a complete package. Through its turnkey application programming interface (API) for whitelabeled crypto brokerage services, Paxos allows enterprises to offer their customers a transparent and simple way to buy, sell, send, and hold their crypto assets. In 2020, Paxos Trust Company partnered with UK-based payment service provider Revolut as well as ecommerce giant PayPal. Given Paypal’s hundreds of millions of accounts (including tens of millions of merchant accounts), this partnership represents an unprecedented increase in user access to the cryptocurrency asset class.

What Is PAX? Cryptocurrency and Token Accessibility

Paxos gives both institutional and retail investors access to several cryptocurrencies. Users can convert their fiat into bitcoin (BTC), ether (ETH), bitcoin cash (BCH), litecoin (LTC), pax gold (PAXG), pax dollar (USDP), and other assets, with more being added regularly. USDP is pegged to the dollar at a 1:1 ratio, while the PAXG token is pegged to the price of gold in U.S. dollars. The Paxos stablecoin USDP serves as an efficient on-ramp for new users to buy other cryptocurrencies. PAX gold, on the other hand, lowers the barrier to entry for investing in gold by allowing users to store a digital representation of it with reduced risk of seizure and without incurring all of the financial and logistical costs of securely storing physical gold. Additionally, PAXG offers instant settlement with minimal fees (0.03 to 1%) and is redeemable for real gold bars.

itBit Crypto Trading & OTC Service

Compliant through the New York Department of Financial Services (NYDFS), itBit (Paxos’ trading service provider) gives users access to a network of clients in more than 100 countries worldwide. This network in turn provides accessibility to some of the deepest fiat-to-crypto liquidity pools in the industry; ItBit also offers institutional grade security with cold storage custody. Traders placing market orders are given customer rebates that are instantly credited to their accounts in cash.

The itBit crypto exchange features tiered fee rates per transaction, and never charges any withdrawal fees for users sending their currency off of the platform. Maker and taker fees are determined by the 30-day rolling average of user trading volume, and are charged on a basis points system (a basis point equals 1/100th of a percent).

The solution also offers different types of APIs for a diverse range of client types — including the FIX 4.2 API protocol for institutional high frequency trading, the REST API for high frequency algorithmic trading, and other solutions that provide traders with unlimited access to ongoing market data. Moreover, itBit also offers an over-the-counter (OTC) desk for trades over $100,000. The OTC desk offers enhanced security protocols and competitive pricing for trading crypto assets.

Paxos Custody Management

The Paxos Trust Company is a qualified custodian regulated in New York State, and adheres to regulatory and compliance standards to help ensure its customers’ assets are well looked after. Its fiat and crypto assets are backed by USD-equivalent capital reserves that are verified with regular audits. Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) verification is mandatory, and 100% of user assets are stored in cold storage with regular and auditable reporting done monthly, quarterly, and annually. To add to these features, Paxos’ custody clients have access to customer service five days a week from their offices in Singapore and New York City.

Paxos Blockchain-Based Settlement & Post-Trade Confirmation

Paxos allows institutional investors to automate their post-trade workflow (for commodities, equities, and forex markets) utilizing enterprise-grade security systems to help manage the entire lifecycle of the trade. The system allows for net settlement automatically — without lengthy phone calls or e-mails. First, Paxos receives the user’s trade data (in formats such as API, JSON, CSV, XLS, XML, PDF, and more) from an existing platform, and then it automatically sends and matches requested trades. Afterwards, the system automatically calculates and verifies payment locations and delivery amounts to instantly send transfers to the user’s bank, depository, or vault.

The Paxos settlement service platform is directly integrated with broker-dealer internal systemization, rigorously tested interoperability, real-time transparency, and usability, and has the ability to instantly unlock clearing capital. Paxos employs strong liquidity and cost saving metrics, with a single source of truth for stock-related record keeping that can help businesses to quickly adapt to ever-changing market dynamics.