BitPay & Paxos Team Up
It has been recently announced by the developers of the newly launched stablecoin, Paxos Standard token (PAX) that they will now be supported on the leading crypto payment processor, BitPay.
In the blog post by PAX, they announced the news saying, “BitPay merchants and businesses now have the option to receive settlements in PAX, the digital equivalent to the US dollar.” in addition to this the partnership between Paxos and BitPay aims to give business owners the “speed and accessibility of cryptocurrencies” whilst is also provides the stability and reliability of the US Dollar.
It’s worth noting that Paxos mentions in the post that the “new settlement option is particularly valuable for overseas businesses that have limited access to a currency as stable as the USD.” Furthermore, the PAX stablecoin might be a safer option for other digital currencies as it is a regulated medium of exchange.
As it has been said by the stablecoins issuers, for every PAX token “in circulation is backed by a US dollar held in an FDIC-insured bank.” The Federal Deposit Insurance Corporation (FDIC), will provide “deposit insurance to depositors” who hold funds in US-based “commercial banks and savings institutions.”
Earlier in the year, the PAX token was launched on 10th September 2018 which meant it was the first ever regulated stablecoin as well as the Gemini Dollar which was launched on the same day.
The PAX token has been approved and is regulated by the New York State Department of Financial Services. As covered, the issuers of the PAX stablecoin must be able to “implement, monitor and update effective risk-based controls and appropriate BSA/AML and OFAC controls."
Because of funds being used in illegal activities, these regulations have to be put in place to prevent it from happening. This also includes drug trafficking, money launching and any other similar activity.
These measures will help enhance consumer protection. There have been some users which have complained about PAX having the possibility to freeze user funds and even seize them when instructed to by law enforcement officials.
An Ethereum user by the name of John Backus spoke on the matter saying:
“I get we need compliant stablecoins, but giving the government direct control to the smart contract seems excessive.”
What are your thoughts? Let us know what you think down below in the comments!