CFTC TAC

Panel II: Stablecoins

Paxos CEO & Co-Founder Charles Cascarilla

February 26, 2020
About Paxos
A regulated, qualified custodian modernizing 

financial market infrastructure
Our Presence

Founded 2013

120 employees worldwide

$93M capital raised

New York Singapore London
Our Board
As a regulated Trust Company, we have strong regulatory and compliance controls that underpin 

our deep experience as the gateway between traditional and digital assets

Regulatory Oversight

Highest regulatory status in the 

industry as a NYDFS-regulated 

Trust Company

Asset Protection

Multi-party signatory storage and USgovernment guaranteed financial 

instruments secure customers’ crypto 

and fiat funds

Technology

Innovative technology platforms and 

APIs that partners can use to build 

white-label products

Pillars of Paxos
Our Products

Tokenized Assets

Stablecoin (Paxos Standard/PAX)

Stablecoin as a Service (Binance USD/BUSD, HUSD)

Gold-backed tokens (PAX Gold)

Crypto and Cash Management Solutions

Crypto and cash custody, exchange trading, OTC trading, 

fiat gateway, stablecoin swap and more, all available via API

Post-Trade and Settlement Solutions

Services include post-trade confirmations, netting, 

settlement, custody and more for commodities and 

securities
Our Customers

Paxos serves a diverse 

customer base of 

established financial 

institutions and 

technology businesses
Regulatory Foundation

In 2015, Paxos became the first blockchain 

company to receive a Trust charter from 

the New York Department of Financial 

Services (NYDFS).

● As a trust, Paxos is considered a 

‘Qualified Custodian’

● The NYDFS approval provides Paxos

reciprocity and legitimacy in many other 

jurisdictions

● The trust serves as the foundation for 

other current and future licenses and 

approvals
Approvals and Regulatory Clearances

● SWIFT - enables access to the largest messaging 

network for transactions between financial institutions

● MSB - Licenses in GA and CT

● FED NSS - Allows Paxos to move money and settle 

transactions through designated master accounts at 

Federal Reserve Banks

● Vaults - Financial accounts with accredited vault 

operators allow Paxos to custody and settle precious 

metal transactions globally

● DTCC - Enables Paxos to provide solutions for US 

securities - the vast majority of securities transactions 

in the US are settled at DTCC

● SEC No-Action Relief - Allows Paxos to conduct 

pilot program for securities settlement for 2 years

● CA-1 - In progress, Paxos is pursuing an SECapproved clearing agency for clearing & settling 

securities trades on blockchain
Paxos Stablecoins
● Every token is issued 1:1 in exchange for $1 USD

● The entire reserve is 100% collateralized by USD held in full (not by fractional reserve) in 

dedicated omnibus cash accounts at FDIC-insured banks

● This is a digital asset that is a representation of US dollars - providing all users with the 

confidence of the physical dollar matched with the speed and flexibility of a digital asset

● Key characteristics: available 24/7 (outside of banking hours), accessible globally, safe, 

stable, built on an open system (Ethereum)

Paxos Standard (PAX)

$1 Paxos Standard (PAX) = $1 USD
Large companies leverage Paxos

infrastructure to power custom-branded and 

regulated stablecoin solutions without the 

technology burden or regulatory expertise.

Paxos is the only company that is able to 

offer regulated, white-labeled stablecoins.

Stablecoin as a Service
• Paxos Trust Company and its stablecoins are regulated by the New York State Department 

of Financial Services

• As a Trust, Paxos has bank-like supervision and is bankruptcy remote

• Reserves are held in only the safest financial instruments

• Monthly attestations are conducted by a third-party auditing firm

• Transaction monitoring is on-going for funds on platform and “in the wild”

• Regulatory complaint resolution process

How Paxos Stablecoins are Regulated
Use Case for Stablecoins

For Consumers

● Trading - USD is the preferred denomination in which to quote and trade crypto

● Settlement & Payments - transfer funds instantaneously

● Holding and Saving - currency stability and the ability to save, especially for people who typically only have 

access to hyperinflationary currencies

For Businesses

● Commercial Banks - real-time account settlement between account holders

● Payments Processors - accept and settle consumer settlements with little cost

● Global Businesses - accept US customers and US dollar deposits

● Crypto Exchanges - Offer exchange-branded stablecoins to facilitate crypto trading

● Remittance Providers - lower cross-border fees and open up new remittance corridors
Thank You