Paxos Standard Savings Accounts – How to Make Money With $PAX
Paxos Standard (PAX) was launched by Paxos Trust Company, a tech company and financial institution specialized in blockchain and based in New York, in September 2018. 1 PAX is always equal to 1 USD. Paxos was one of the first regulated stablecoins in the sector.
Paxos Trust Company digitizes and mobilizes assets. The company also runs a Bitcoin exchange called ItBit, which was the first BTC exchange that the Department of Financial Services of New York State licensed. The DFS granted ItBit the right to be the exchange and custodian for US customers.
The creators of PAX have offices in London and Singapore and obtained funding of $240 million between their founding in 2012 and the end of 2020.
How Does PAX Work?
Paxos Standard is a stablecoin collateralized in fiat, which offers the benefits of price risk mitigation and transactions with assets based on the blockchain. PAX are issued on the Ethereum blockchain as ERC-20 tokens. Apart from BUSD and GUSD, PAX is the only stablecoin that Wall Street regulators approve.
PAX Stability
US dollars back the USD stablecoins held by Paxos Trust Company by debt instruments that the US government guarantees with full faith and credit. Some of these instruments are guaranteed by money market funds for the benefit of stablecoin customers. In other cases, PAX is held with US banks in segregated custodial accounts.
To maintain a ratio of 1:1 between PAX and the USD at all times, Paxos Trust Company either buys debt instruments or deposits the US dollars used to buy PAX in insured depository banks. The PAX then corresponds to the face value of the debt instruments or the USD deposit value.
PAX Market Cap
On April 2, 2021, the completely diluted market capitalization of PAX was $972,140,091, corresponding to a total of 972,076,939 PAX in circulation.
How is Paxos Standard distributed?
PAX works with third party software supporting ERC-20 tokens. PAX’s creators accept deposits in USD and issue stablecoins that holders exchange and transfer easily and simply. PAX offers the convenience of maintaining stability along with digital asset liquidity. This is a nice reprieve considering that the current digital asset economy is very fast, global, and fluid, but trade between fiat and digital assets is still encumbered due to banking system delays.
How are PAXOS Coins Issued, Stored, and Supplied?
Paxos.com issues and redeems Paxos coins. PAX is issued directly without the need for mediators. Due to this, holders enjoy lower fees, shorter redemption windows, and more efficient operations. It takes just one business day to redeem Paxos coins for USD.
If you need to facilitate settlement of payment, asset tokens, security, crypto, or any other asset, you’ll find PAX is available around the clock. This is different from traditional currency, which is only accessible for settlement when the bank is working. You can move this stablecoin at any time and anywhere. One can program PAX. The stablecoin can be used to take part in the bigger international community of tokens, facilitating a platform for stable and programmable money. As a regulated trust, the creators of PAX are committed to holding and protecting physical and digital assets.
PAX Regulation
Paxos Trust operates under high standard principles of governance as a company regulated by the Department of Financial Services of New York and organized under NY banking law. It acts as a depositary that custodies deposits of customers and always keeps them separate unlike banks, which uses client funds to fund their operations. US government treasuries collateralize some client deposits in USD. Others are held in FDIC-insured banks. No dollar is unaccounted for.
Security and Insurance
Anyone with a wallet on Ethereum can send or receive PAX. Transactions operate according to smart contract rules following the ERC-20 protocol on the Ethereum platform. The system cannot operate differently than how it’s been programmed to because of this smart contract. The possibility of human error is brought down to a minimum.
Paxos Standard coins are listed on exchanges worldwide. They can be used as a proxy to estimate USD value compared to other cryptos because the USD backs them. ItBit lets users cash their holdings out instantly and directly to PAX instead of cash if they wish to.
How Long do $PAX Transactions Take?
Transactions are near instant, easing the friction of global payments typical of international trade and transactions and cross-border remittances. In essence, PAX has the potential to remove cross-border transaction fees, allowing more fluid trade and commerce.
How to use $PAX?
You can use PAX to cash out cryptocurrency without incurring expensive bank transfers. It serves the purposes of payments and fast, borderless money transfers. You can run a business on PAX today and save a lot of money doing so.
PAX is an improvement on fiat money in each and every way. It ensures the same value store, maintains the same account unit, and is easier to exchange. It’s an improved funding model thanks to the support of a regulated financial institution and fully USD collateralization.
The exchange rate between Paxos Standard tokens and the US dollar is 1:1. PAX can be issued as well as redeemed for USD 1. This is the essence of a basic smart contract. Transactions with PAX always transpire in a programmed way. In the future, it will be used outside of the blockchain as well.
Who can use It?
The makers of PAX aim for it to be used by vast populations of consumers as their main currency one day. This is a lofty ambition, and only time will tell. The potential is definitely there. In 2017, 5% of the population had neither a money market, nor a savings, nor a checking account. This share is the unbanked population according to data of the Federal Reserve. This untapped market is not to be underestimated – it accounts for 13 million people in the US. Many communities outside the US operate with volatile and unpredictable currencies, which suppress their ability to plan for the future and create and sustain value.
At present, Paxos Standard offers economic freedoms that would be otherwise inaccessible to these populations. It can be used as a substitute for USD in trading, including on platforms that don’t require ID verification. Unlike fiat money, it can be transferred easily from one platform to another.
Exchanges That Support PAXOS Standard
PAX is supported on Binance, Bitfinex, Bittrex, OKex, Poloniex, and more. We’ll go into each exchange in this section.
$PAX on Binance
Binance added PAX as a base currency on its exchange back in 2018. Since then, it’s available to be exchanged for other listed digital assets. PAX is seen as a refreshing alternative to Tether on Binance, which has been marred by controversy lately. Before PAX, Tether was the only stablecoin on this exchange. You can trade PAX against Bitcoin (BTC), the Binance Coin (BNB), Ethereum (ETH), EOS, Stellar Lumens (XLM), and Ripple (XRP).
$PAX on Bitfinex
PAX is exchanged for USD at a rate of 1 to 1.0004.
$PAX on Bittrex
On Bittrex, you can trade PAX for BTC at 1 PAX to 0.00001686 BTC (rate effective April 2, 2021). The rate to USD is fixed at PAX 1 for USD 1.
$PAX on OKex
1 PAX trades for USD 1.0001 on OKex. Other stablecoins available for trade against PAX here include TrueUSD (TUSD), USD Coin (USDC), and the Gemini Dollar (GUSD).
$PAX on Poloniex
Poloniex added PAX and USDJ to their crypto roster. The trading pairs available are PAX/USDT, BTC/USDJ, BTC/PAX, ETH/PAX, TRX/USDJ, and USDJ/USDT.
$PAX on Huobi Global
Huobi Global introduced a large number of stablecoins in 2018. Currently, deposits in Paxos Standard (PAX), USDCoin (USDC), TrueUSD (TUSD), and Gemini Dollar (GUSD) are available. These currencies can be traded as well.
$PAX on Kucoin
Kucoin has BTC/PAX, ETH/PAX, USDT/PAX, and other trading pairs.
PAX can be exchanged for Bitcoin through a paxos.com platform account, Binance, and other platforms. Then, you can cash out Bitcoin for USD. You can also purchase PAX with USD from paxos.com and from Bitstamp. The latter’s current rate is $0.99949 PAX/USD.
You can cash out PAX on crypto.com and other exchanges. To do so, deposit PAX from your app of choice and initiate a transfer. On paxos.com, there is a “Transfer” button for function to withdraw funds in USD. Enter your bank details to send USD to your bank account.
The withdrawal fees range from 0 to 56 dollars on Bittrex. This site compares withdrawal fees on 28 exchanges.
How to buy PAX With Credit Card
You can purchase PAX with credit and debit card on exchanges like Bitdegree, which provide instant confirmation. Payouts are in 24 hours on average. Registration is quick and not many details are required. KYC verification is minimal as well. In fact, purchasing PAX with credit card instantly is the most effective and simplest way to buy this cutting edge, alternative asset. It’s risk free, quick, and easy.
Regardless of which exchange you choose, you need to select PAX from the drop down menu and the fiat currency you’ll be using to make payment. Then, enter how much PAX you want to buy followed by your PAX wallet address. The second to last step is entering your billing information at checkout. Make sure it’s accurate. When paying with Mastercard or Visa, there is zero fraud risk.
The final step is getting the PAX in your account. You don’t need to create a new account to complete the sale.
PAXOS Standard Stablecoin Savings Accounts
As you may know, crypto fintechs can offer returns on savings that traditional banks cannot match. Traditional financial institutions have been extremely slow in responding to fintech’s dramatic growth. They are equally slow when it comes to the dynamic crypto and stablecoin banking sector. They sit on the sidelines while exchanges like Crypto.com and Blockfi rush to develop PAX accounts with high interest, bridging the gap with fiat’s more established world.
Banks remain inert even though the crypto market is growing in value incessantly and more and more federal regulators and central banks in vibrant economies are endorsing and admitting the crypto industry.
The following table shows the minimum interest per year several typical fintechs are offering PAX holders. In comparison, you can’t hope for more than 1.5% from a traditional bank.
Comparison Table
| Exchanges | PAX approx. APYs | Terms | |
|---|---|---|---|
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8.6%
|
|
Details |
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12%
|
|
Details |
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10.3%
|
|
Details |
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10%
|
|
Details |
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6.5%
|
|
Details |
Our Final say on PAX: Pros and Cons
PAX has many benefits as an ERC-20 token on Ethereum’s blockchain. This blockchain is one of the most secure and intuitive in the world. PAX has been adopted by retail users, institutional investors, digital asset organizations, exchanges, and other digital asset stakeholders on a broad scale. Its pattern is familiar and relatively simple as a basic smart contract. Supply of PAX can be verified publicly, as can on-chain transactions and account balances.
The Ethereum blockchain is not without downsides. It can experience a fork in the protocol, network changes, backlogs, and elevated transaction fees. The creators of PAX state they cannot be held responsible for network operation because they neither control nor own the Ethereum blockchain. They cannot make any guarantees for the availability, functions, or security of the network.