An article to understand the business landscape of the emerging encryption giant "Paxos"
according toThe Blockaccording toStablecoin PAX Issuer PaxosIt has completed $142 million in Series C financing. Investors include Declaration Partners, PayPal Ventures, RIT Capital Partners and investment banking legend Ken Moelis. This round of financing will be used to expand businesses such as stablecoins, transactions, and blockchain settlements.
according tocrunchbase.comAccording to statistics, previously, Paxos completed three rounds of financing, including a seed round of US$3 million, a round A of US$25 million, and a round B of US$65 million.Canaan PartnersandRRE Venturesimage description
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Paxos is far less well-known in China than Tether, and its stablecoin PAX does not necessarily have a large market share. How did it win the favor of the payment giant PayPal? We might as well look at its business map hidden under the iceberg from the outside to the inside.
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The third largest stablecoin issuer
After two years of development, the two major compliant stablecoins seem to have given different answers.
according toQKL123according to
In addition to issuing its own stablecoins, by 2019, Paxos has also started the business of "Issuing on behalf of customers". Taking advantage of compliance, Paxos has successively received "orders" from the two leading exchanges, Binance and Huobi. Among them, BUSD has been issued for one year and has performed very strongly.
according todebank.comimage description
source:debank.com
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In addition to the dollar-anchored currency, Paxos, which has been involved in the field of precious metals trading, also issued the gold-anchored currency PAXG.
according todebank.comaccording to
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source:paxos.com
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Opened a B-end exchange, the transaction volume exceeded 3 billion US dollars
Compared with the familiar C-side USD stablecoin, Paxos may have a larger B-side business.
In October of this year, PayPal announced the global opening of cryptocurrency payment services, which caused a carnival inside and outside the circle. Affected by this news, PayPal's stock price rose by 5.5% in a short period of time, setting a record since May this year.
But what everyone didn't notice was that there was a "low-key happy" winner behind this announcement-Paxos.
PayPal is partnering with Paxos to provide encrypted transaction services. This is to say that Paxos’ second largest business is itBit, a legal currency-cryptocurrency exchange that provides compliance (regulated by the New York Financial Services Authority DFS) and pending order rebates for institutions and large investors. It is through Paxos that it provides transaction services for PayPal users' 346 million active accounts (including more than 26 million merchants).
At that time, many people had expected that PayPal, a major customer, would bring huge transaction volume to it. Let's see how it works?
It can be seen from the figure that since November, the 24H trading volume of itBit has risen exponentially, from less than US$10 million in October to US$90 million in December. According to The Block, since the beginning of this year, itBit's transaction volume has reached $3 billion, nearly half of which has come from the transaction volume since PayPal began offering cryptocurrencies in late October.As signs of a crypto bull run emerge, this could be just the beginning. asCryptographer Gu Yanxi
In other words, the greater imagination of the cooperation between Paxos and PayPal is to incorporate PAX, a compliant stablecoin, into the payment currency to improve the convenience of cross-border payments.
In fact, the business that Paxos provides for PayPal includes providing regulatory solutions, open APIs, etc. in addition to the necessary components of the exchange. In addition to PayPal, well-known customers of Paxos include European financial technology company Revolut and so on.
In addition, Paxos is also developing a fourth business recently.
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Applying to the National Trust and want to be the next Grayscale?
From the cooperation between Paxos and Binance, PayPal and other companies, we should already know the attraction of compliance.
Chad Cascarilla said that after this round of financing, Paxos plans to add more than 100 employees and improve its business map by seeking a National Trust license.
What is this trust license that Paxos "covets"?
Grayscale Fund was founded by Digital Currency Group (DCG) in 2013 and is a trust fund regulated by the SEC.
andandNational Trust Bank of the United States, which Paxos opened on December 8
, which is regulated by the U.S. Office of the Comptroller of the Currency (OCC) under the U.S. Department of the Treasury. OCC's regulatory objects also include national banks and Federal Savings Associations, etc. It is one of the main financial regulatory agencies in the United States.
The content of trust business includes operating, managing or handling monetary funds or other properties on behalf of entrusted units or individuals. Of course, the specific mode of business development depends on whether the license can be applied for.
according toaccording toAsia Pacific Future Finance Institute
As soon as the company files an application, the OCC will start reviewing it. There are many key elements of the review, including the proposed bank's business model, risk profile, personnel composition, whether there is a clear profit method and timing, whether there is sufficient capital and its liquidity to support the expected transaction volume, and has matching skills , organizers, management, etc. with relevant experience.
From this point of view, the review may not come soon.
As Chad Cascarilla told The Block Live: “Some of these things take time. We’ve invested in this regulatory infrastructure for seven years now.”
If the National Trust Bank license applied for this time is approved, it will undoubtedly further pave the way for this encrypted financial empire.
