“I was surprised, when we asked the New York authority to stabilize the coins, they think this is a good idea.” Paxos CEO Charles Cascarilla Odaily told the daily planet.
As an American financial technology company Paxos in Chinese, best known for its outstanding stability is $PAX. Currently only a regulated license stable currency: Paxos issued Paxos Standard (hereinafter referred to as PAX) and Gemini Gemini Dollar issued by the company (GUSD), is to anchor the stable US dollar, by the financial supervisory authority of New York (NYDFS) in the approved this year 9 month 10 day.
It is a great advantage for the compliance of the two companies. Industry sources told the daily planet Odaily, Gemini for compliance, security valuation is higher than global currency exchange first. Charles said, Paxos raised $about 93000000 in financing, is not the Unicorn ($one billion valuation of the company).
Two kinds of stable currency on the eve of the birth of compliance issued by Tether company, the stability of currency USDT Monopoly money market, a crisis of confidence. The reserve mechanism is opaque, the main reserve banks face the risk of bankruptcy, the authority of law firms refused to endorse, these are so much criticism. Market dissatisfaction don’t trust USDT, and see the supervision of affirmation, in mid October with a USDT flash down, stable currency war kicked off. Dozens of couldn’t name the stable currency call to replace USDT, stable currency pattern will be changed to.
Over the past two months, the most stable currency stable currency Basis star disappeared, came in 13 due to regulatory pressure will be shut down. According to Stablecoinwars, PAX market share ranked second, USDT still occupies up to 96% market share.
Stable currency, profit model, and the attitude of regulators, are on the subject of concern. Recently, the daily planet Odaily on these issues with the Paxos CEO Charles Cascarilla. Charles said, Paxos does not intend to rely on stable currency earnings, it also plans to recharge, trading and redemption are never charge. He thinks, want to get the trust of users, stable currency must comply with regulation and transparency, “I feel a little bit crazy stable currency regulation and supervision;” this concept is not exclusive, New York authority attitude on the stability of currency is very open, they think by stable regulation to protect the interests of investors.
In order to user trust, spent three years in compliance
Paxos was founded in May 2015, but in 2011 Charles began preparations for the company.
Paxos spent three years in compliance.” This is the eyes of Charles Paxos with other block chain company is not the same place. “We are a financial institution (banking institution), rather than (money transfer), the remittance company which is let us different from other block chain company place. Remittance company regulated this licence is very light, need to pay an annual report each year. Our customers tell us is a formal legal relationship.”
Digital currency transaction or transfer of business in the United States, the law should have relevant certificate. Remittance business license (Money transfer license) is a lower threshold for the qualification, only needs to submit a report every year, the regulation is very light. Currently involved in digital asset transfer transactions are generally the only license. Paxos said, the entire block chain industry so far the trust does not exceed 5.
The Paxos attribute is a trust company, which means our assets on behalf of customers in the bank, but not in our name. The supervision of trust company audit is extremely strict, is similar with the bank, so difficult to apply for special licence”. Here is a mature hosting mechanism of traditional financial industry. For example, asset management institutions can manage the account assets but not to mention now, reducing the risk of misappropriation of funds and run away. In the field of digital currency has not yet formed a similar system. “We as a trust company, there is no way to move the user’s money.”
Charles, according to the laws of the state of New York, trust companies need to comply with banking law. The approval of a trust company, regulators will first do a background check for and core members, the company intends to purchase insurance, independent directors, these are the basis of. “When we get a license, it has been 3 years.”
After the establishment of the company needs to regularly publish quarterly reports; every year, regulators will to trust in the 4-6 week, the check for compliance. We have an outside company, give us the internal audit; and DDT do our external audit, will regularly report regularly to the independent directors to the regulators and the company’s will, and continuous monitoring of our capital.
“We spend so much time and energy, is for customers to trust us.” Paxos’s early vision is stocks, precious metals and other traditional assets token. “If you want to put any digital encryption currency issuance of assets, or their own qualifications, or with the third party cooperation.”
According to the Charles share, regulators do not oppose the digital currency, just worried about the damage to the interests of investors. “They think there is a stable currency regulation, is good for consumers.”
Since the regulation is very important to stabilize the currency, the daily planet Odaily curious, why doesn’t the government do?
“If the government is doing, I think it is very good.” Charles said that the U.S. government did not do a good job in innovation leading role, such as the United States bank transfer actually very slow, Chinese banking infrastructure is better. If the United States government directly to do this requires a very long time, businesses can lead to.
What is the use of stable currency? 7*24 hours without friction transfer
USDT is the largest digital currency and RMB channel, which are based on the legal tender admission can not directly buy currency. One of the most fundamental problem, if the currency can in the field of digital currency compliance, stable currency what role?
Charles summed up the two points: 1, stable currency is the infrastructure of digital asset circulation chain; 2, stability can make more flexible and more wide circulation of dollars.
As mentioned, Paxos was founded in mind is to take financial asset digital, now the company has other business section of precious metals and STO (digital security token service issue). Charles was originally engaged in the hedge fund industry, after the discovery of the bitcoin blockchain after and very excited, think to the center of the network can change the transfer of assets, and then began to explore.
In exchange Business Hours Limited traditional financial asset trading time, assets can make digital assets can be 7*24 hours of trading, transfer and cross-border circulation more convenient. “I didn’t think I started to do the stable currency, just want to put the stock, real estate, precious metals, these digital. Had not realized cash flow barriers is also great, is the foundation of digital cash.”
He said, the total market value of the virtual currency area only tens of billions of dollars of assets. The real world, a day of cross-border circulation of assets has about 600 trillion, more than 50 trillion dollars of cross-border payments every day. The need to rely on the bank to transfer cross-border financial institutions, is also the only time to work in a bank, a trader needs to be met, and the arrival speed is very slow. The chain transfer of the assets without a similar restriction. Paxos estimates, compared to the traditional financial system, the future chain transaction costs could save 80-90%.
“Stable currency is the biggest difference with the dollar cash, but more flexible, is open to the digital currency. Everyone can transfer money to all people, without intermediary.” Charles believes that the issue of currency stability allowed the dollar to its own circulation, you don’t need to have the bank account can have $. “We accept customers from all over the world, as long as a registered account to buy PAX.”
At the same time, the user can redeem at any time PAX. “We will not stable currency price volatility, we work with a lot of different exchange and OTC trading platform, in order to prevent manipulation of prices.” Charles said, there have been more than 100 million dollars in PAX redemption.
Stable currency is the infrastructure, do not intend to charge
Stable currency value, but the commercial company how to profit from the market, probably thinking has long been a problem.
Paxos’s answer is that we do not rely on stable currency earnings. “PAX issuance and redemption, transaction fees are not, the future is not going to charge, the main profit model is the bank’s interest.” For all other assets, either in public or private — chain, is a stable currency future infrastructure. “We want PAX to be more extensive application, the main program profit point is token other assets, then charge transaction fees and custody fees etc..”
Before the stable currency, Paxos is involved in the three block of business, including (1) virtual asset custody, Paxos has also set up the exchange; (2) physical assets of $token, trading volume has been 200 billion precious metal chain trading platform at present; (3) STO for the enterprise, is not necessarily the public offering. In the public or private chain chain can.
At this stage, stable currency PAX the most important task is to get the user, after all, only 2% of the market share is difficult to become the infrastructure.
PAX is actively trying to exchange and docking wallet. According to the data given by Paxos, the on-line PAX exchange of more than 40, including ten of the exchange trading volume before, at the same time is the base coin placement; Ethernet imtoken has launched PAX square wallet.
In addition, PAX is also a BitPay platform for the transaction settlement. “We are very optimistic about the payment but at this stage it is too early next year, we will focus here.”
“Do you think the future stable currency what will win?” The end of the interview, Odaily asked the daily planet.
“It is very difficult to answer. But the design and supervision is very important. The future is hard to predict, the user will choose.” Charles apparently attaches great importance to compliance. Asked how to look at some people think that USDT falls with bankers, he stressed: “this matter I have no right answer, other people do not know, this is a big problem in itself. So I need someone else supervision and audit, to ensure that our (stable currency company) that is really something.”
I’m Odaily the daily planet editor Lu Xiaoming, exploring the real exchange block chain, broke the news, please add WeChat lohiuming, please note Name, unit, position and reason.