Paxos rebrands stablecoin to challenge rivals Tether and Circle
|- Paxos is fighting for a bigger market share among stablecoins as it aims to distinguish itself from the competition.
- The stablecoin will be rebranded to Pax Dollar (USDP) to gain better recognition.
- Currently, Tether and Circle USD are among the top ten cryptocurrencies by market capitalization.
Paxos will rebrand its stablecoin from “Paxos Standard” to the “Pax Dollar” as it aims to distinguish itself from competitors including Tether and Circle. The New York-based crypto firm previously stated that USDT and USDC were “unregulated,” highlighting issues of their reserve breakdowns.
Paxos highlights reserve transparency
Paxos Standard will become Pax Dollar, with the token’s ticker symbol USDP. According to Walter Hessert, the head of strategy at the blockchain firm, this would allow users to “instantly recognize” the token as a dollar-pegged stablecoin.
Currently, the stablecoin market is heavily dominated by Tether, as it is the fifth-largest cryptocurrency by market capitalization with over $65 billion. Circle’s USD Coin is not far behind, ranking eighth by market cap with over $27 billion.
Paxos has long held the position that it is the safest among all the stablecoins in the market due to its reserves consisting almost entirely of US dollars and short-term Treasury bills, unlike its rival USDT.
Tether’s Q2 attestation report revealed that 49% of its reserves were held in commercial paper and certificates of deposit. Only 10% of the reserves held for USDT were held in cash and bank deposits.
Paxos also stated that Circle’s USDC was not also a true stablecoin, due to the fact it is similar to Tether, with a major portion of its reserves backed by assets including commercial paper and bonds.
Earlier this week, Circle announced that it would make a shift in its policies to make its reserves only backed by US dollars and short-term Treasuries.
Paxos also noted that the Gemini Dollar, GUSD, operates similarly from a regulatory perspective; the company has not published its reserves.
The updated ticker for Pax Dollar, USDP, will come into effect through a smart contract on August 31.
According to Hessert, due to the shifts in the cryptocurrency and decentralized finance market, the firm foresees more global use cases for payments for goods and services, therefore there may be a heightened role for stablecoins to play given the increase in demand.
Paxos continues to strive to be a trustworthy, transparent stablecoin despite other dollar-pegged token options in the market.
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