Blockchain startup Paxos has secured approval from New York regulators to launch a US dollar-pegged stablecoin
The startup claims that its Paxos Standard is the world's first regulated crypto asset thanks to the green light from the New York State Department of Financial Services.
However, Gemini Trust Company, the crypocurrency exchange run by the Winkelvoss twins also received NYDFS approval for its Gemini dollar product today.
Department of Financial Services Superintendent Maria T. Vullo states: “As the financial technology marketplace continues to evolve, New York is committed to fostering innovation while ensuring responsible growth. These approvals demonstrate that companies can create change and strong standards of compliance within a strong state regulatory framework that safeguards regulated entities and protects consumers.”
Built on the Ethereum blockchain, the Pacos asset is fully collateralized by dollars, offering a liquid, digital alternative to cash that is available 24/7 for instantaneous transaction settlement and is fully redeemable.
Paxos says that as a Trust company it is a fiduciary and qualified custodian of customer funds, and can therefore offer greater protections for customer assets than any other stablecoin. Dollar deposits are always held in segregated accounts at multiple FDIC-insured US-domiciled banks.
Charles Cascarilla, CEO, Paxos, says: "We believe that Paxos Standard represents a significant advancement in digital assets, leveraging the oversight and stability of the traditional financial system and enabling a frictionless global economy."
Separately, it has emerged that Lightyear has acquired fellow crypto startup Chain for an undisclosed fee, creating a new combined company called Interstellar. Chain, which raised more than $40 million from financial institutions including Visa and Nasdaq, has implied that corporate reluctance to take a chance on its technology was a significant barrier to its long-term ambitions to build a viable blockchain network.