- 26 Mar, 23
Pax Dollar (USDP) 101: The Flexible Stablecoin Explained
Pax Dollar is a cryptocurrency created by Paxos Trust Company. This cryptocurrency operates as a stablecoin backed 1:1 with the US dollar in the market. This means that each USDP coin trades at an equal price to one US dollar.
The company achieves this equality by holding an equivalent amount of dollars to token supply in US banks, making the asset function as a collateralized stablecoin. The amount of held dollars is regularly audited to maintain the stability of the stablecoin. If you want to learn more about the project, this Zatrun.com article is for you.
Table of Contents
What is Paxos?
USDP coin, with various use cases in the Paxos ecosystem, is built on the Ethereum blockchain. As such, the asset uses Ethereum’s ERC-20 standard. The stablecoin attracts investors who want to avoid high volatility in the cryptocurrency market. Additionally, it offers investors more flexibility and speed than the US dollar, thus increasing its user base over time. Now let’s move on to other details you need to know about the asset.
Paxos is a blockchain platform that offers a fully regulated range of cryptocurrency products for both individual traders and institutional customers. Its focus is to provide a secure and stable environment to integrate with cryptocurrency markets.
As a fully regulated ecosystem, Paxos offers not one but two different crypto assets. These are USDP, pegged to the US dollar, and PAX Gold, which tracks the price of gold. The platform emphasizes transparency and security through regular audits of the assets supporting USDP coin. They are also working to create a seamless global payment system.
What is Pax Dollar (USDP)
Pax Dollar (USDP) was created to provide greater accessibility and flexibility for everyone, everywhere. This flexibility and accessibility provide significant benefits for users to send and receive dollars. Additionally, the project offers these advantages at a cost significantly lower than traditional financial tools. Typically, significant expenses are incurred in cross-border money transfers. However, when using USDP coin in the Paxos ecosystem, you can transact at extremely low fees.
One of the most significant advantages of Pax Dollar is its ability to facilitate unlimited transactions without any requirements. The use of blockchain technology allows Paxos to effectively break free from the limitations of traditional financial systems and offer a stable, decentralised asset with minimal risk.
To purchase the stablecoin, all you need to do is deposit US dollars into a Paxos account. The Paxos smart contract will then generate an equivalent amount of USDP based on the deposited amount, which will then be transferred to the user’s account. Converting USDP back to US dollars is just as simple.
How Does Pax Dollar Work?
Pax Dollar, launched in September 2018, is also used within the Paxos protocol. The asset makes cross-border payments easier and allows you to hold your dollars in the digital world. This means you don’t need a central bank to deposit your money. Additionally, you can convert your USDP to dollars or your dollars to USDP anytime you want, but the minimum conversion amount offered by the protocol starts at $100. Paxos does not charge any fees for converting your assets to stablecoin.
The company behind Pax Dollar, Paxos, has been approved by the New York State Department of Financial Services to provide crypto services. USDP coins are backed by USD held in reserve institutions in the US.
Paxos is building a seamless global network that allows digital assets to be easily transferred with high accessibility and flexibility. The company’s goal is to build a future where digital assets, commodities, and securities can be moved anywhere at any time.
Where to Buy USDP?
Pax Dollar (USDP) can be bought and sold on the Ethereum blockchain, just like ETH or any other ERC-20 token. Users can use USDP by sending tokens to an address controlled by Paxos. This address then destroys the tokens and transfers the equivalent amount of dollars to the user’s bank account.
As it exists on a public blockchain, traders and exchanges use the stablecoin as an alternative to fiat currencies. However, they can also deposit their tokens for banking needs with Paxos.
Currently, the stablecoin has a market value of over $878 million and is ranked as the 58th largest cryptocurrency. As a result, Pax Dollar is available for trading on many centralized and decentralized exchanges in the cryptocurrency market. The asset is currently traded on Coinbase, KuCoin, Huobi, Bitrue, and MEXC exchanges.