Paxos Announces Instant Crypto-Fiat Redemptions
Frictionless redemptions will allow users to move easily between the asset-classes
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The Paxos Standard (PAX) stablecoin has announced instant fiat redemptions, allowing users to easily change Paxos tokens for the underlying US dollars that back them.
“PAX is the only crypto asset to offer this functionality, immediacy and level of confidence with no minimums, maximums or fees associated,” said David Wells, Paxos Product Lead.
Paxos is built on Ethereum (ETH) and, like most other stablecoins, is designed to allow holders to easily leverage blockchain technology while still maintaining a relatively stable value.
The project created a stir when it launched back in September, as it is one of a few cryptocurrency projects which has explicit approval from the New York Department for Financial Services (NYDFS).
Each PAX token is backed on a 1:1 ratio with actual dollars that are held in US-domiciled banks. Unlike previous stablecoin projects, Paxos commissions audits on a monthly basis to ensure that users are aware that the collateral matches up exactly with the tokenized volume.
Market capitalization, representing the number of dollars entrusted to the coin, increased quickly in the first few months following Paxos’ launch, hitting a peak of $181M by the beginning of December. Although it had been on a gradual downward trend, falling down to $102M by the middle of April, in the past few weeks it has since surged back up to an all-time high of $192M.
Redemption had previously taken one day, which was subsequently cut down to four hours earlier this year. Today’s news means users will be able to change value between the two asset classes at any time without any friction.
The present plan will only allow users to instantly redeem tokens for the underlying dollars. But Paxos says that instant creation is also in development and will be launched soon.
Wells said: “[T]here will no longer be any distinction between your USD or PAX balance on Paxos; all will be held as one, unified USD balance on our platform, and available 24/7 to send as either USD or PAX.”
“Transact at the speed of the internet, unlike ever before,” he added, with only a hint of Loki in his voice.