Paxos rebranded as “pax dollar” giving the token a new name as the company tries to challenge bigger stablecoin rivals as we read more in our latest altcoin news today.
The company’s Paxos Standard coin will be known as the “pax dollar” and the move came as the platform tried to challenge stablecoin giants like Circle and Tether. The New York-based blockchain infrastructure company announced on Tuesday Paxos rebranded the name of the Paxos Standard token to Pax Dollar and that the token’s ticker symbol will become USDP:
“The USDP ticker more easily identifies Pax Dollar as a US dollar-backed token … As USDP, everyone will be able to instantly recognize our token as a dollar-backed stablecoin.”
The announcement cam as Paxos is now fighting for attention amid the highly competitive stablecoin market which is mostly dominated by Tether and USDC which is a US-based stablecoin backed by Coinbase and Circle. Stablecoins as the name suggests is digital tokens that lack the volatility that other cryptocurrencies have. They are designed to maintain a 1:1 peg to the national currency such as the dollar though the mechanics of how these peg works have been a topic of contentious debate in the past few weeks.
Paxos has touted what is now the Pax Dollar as the safest of stablecoin because the company created reserves that consist entirely of US dollar or short-term Treasury bills and this is in contrast to the likes of Tether which stores a huge portion of the reserves in commercial paper and other assets. Tether could sell these assets for dollars if a huge number of customers looks to redeem the stabelcoins but in practice, the outcome will be very different especially if a crisis is set to occur. As financial experts say, Tether will have to sell the assets at a loss in the middle of a crisis or be unable to unload them at all which could cause the value of the stablecoins to tumble as the customers realized the dollar peg wasn’t holding.
Earlier this month, the Paxos top lawyer claimed in a blog post that circle’s USDC is not really a true stablecoin like Tether because a portion of its reserves is backed by assets like commercial paper and bonds. Circle blew off the criticism but announced that it was changing the policies so that USDC reserves consist of dollars and short-term Treasuries. Backing the token will dollar and dollar equivalents increases the integrity of the stablecoin but it comes with a cost for the stablecoin issuers since it will earn less interest on the reserves that it holds.
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