Blockchain Trust Firm Paxos to Launch Precious Metal-Backed Stablecoin Later This Year

Paxos Technology Solutions LLC, a New York-based fintech firm that is focused on “mobilizing” money, gold, securities, and other assets at “the speed of the internet,” is reportedly planning to introduce a digital token that will be backed by precious metals such as gold.

Chad Cascarilla, the CEO at Paxos, which has received $93.3 million in funding since being established in 2012, revealed in an interview (published on March 11th, 2019) with Fortune’s Balancing the Ledger that Paxos’ precious metal-backed digital token would “definitely” be launched at some point this year.

Cascarilla, a finance graduate from the University of Notre Dame, explained that developing a gold-backed crypto token could potentially be useful as it would allow investors to “take a [real-world] commodity [and] tokenize it.” Proponents of this method argue that by tokenizing real-world assets, it becomes easier, faster, and more efficient to conduct transactions.

Amount Of Gold You Have In Vaults Should Equal Number Of Outstanding Gold Tokens

Elaborating on how traditional assets can be tokenized on blockchains, Cascarilla remarked:

In order to put something [on] a blockchain [network], you have to make sure you have the right amount of inventory in the real world versus what is [kept on] the blockchain. How you do with a gold token is how much gold do you have in a vault equals how many gold tokens outstanding.

Cascarilla, a former financial analyst at Goldman Sachs, added that Paxos’ status as a licensed financial services company allows it to access the traditional banking system - in order to ensure and prove that they have enough assets in reserves to back the number of tokens they’ve issued.

Commenting on the difference between the Ethereum-based Paxos Standard Token (PAX) and other 1-to-1 USD-backed stablecoins introduced last year, Cascarilla said that PAX’s circulating supply has been fully audited and it’s approved and regulated by the New York State Department of Financial Services (NYDFS). According to Cascarilla, the PAX stablecoin also has a high level of liquidity.

Paxos Completed $65 Million Series B Funding Round In May 2018

First launched as a bitcoin (BTC) trading platform called itBit, the early stage venture-funded startup rebranded to Paxos recently and it now manages a trust company charter in New York. This allows Paxos to access some of the same banking services that are available to large financial institutions. This reportedly includes the ability to serve as a custodian for traditional financial assets.

In May 2018, Paxos had raised $65 million through a Series B funding round which was led by RRE Ventures, Liberty City Ventures, and prominent investor Jay Jordan. In December 2018, PAX token’s total transaction volume (to date) had surpassed $5 billion. This, just three months after the USD-backed stablecoin had been launched (in September 2018). At that time, the market capitalization of all PAX tokens in circulation stood at approximately $174 million.

At press time, the market cap of PAX tokens stands at $113 million according to CryptoCompare data.

New Public Blockchain Hedera Hashgraph Launches with 26 Dapps

Michael LaVere
  • Hedera Hashgraph launches open access to its mainnet blockchain with 26 dApps. 
  • Network will support 10,000 transactions per second, in addition to smart contracts and file services. 

The Hedera Hashgraph team has announced the successful launch of its public blockchain mainnet on Sept. 16, which includes 26 decentralized applications. 

Hedera Launches Public Mainnet

According to the release, Hedera Hashgraph is now open to the general public after months of being in a closed beta network for select developers.

Hedera claims to be have a faster consensus algorithm than the blockchain used by Ethereum and Bitcoin, capable of supporting 10,000 transactions per second. The open-access mainnet also allows users to operate smart contract and files services, with the team planning to increase the network’s speed “methodically throughout the remainder of 2019.”

Heredera’s Hashgraph achieves this transaction throughput thanks to a unique feature called gossip, which sees nodes within its network share information – gossip - on transactions, and subsequently gossip on gossip to record each event on the network and create a hashgraph of information.

The network reportedly achieves consensus and is secure by a virtual voting process, where the hashgraph technology uses nodes to ensure Byzantine fault tolerance. Hedera further has a Consensus Service under development that will be made available to the public later in the year. 

Mance Harmon, co-founder and CEO of Hedera Hashgraph, said, 

We are thrilled that, through open access, dozens of decentralized applications are now live and running on the mainnet, along with mirror nodes and other parts of the ecosystem designed to expand Hedera’s reach and adoption.

Hedera uses “council members” to run nodes and maintain the decentralization of the blockchain. The 39 council members, which include IBM and Boeing, also govern changes to the software. 

The enterprise-focused network has earlier this week seen its cryptocurrency, HBAR, get listed on leading cryptocurrency trading platform OKEx as three new trading pairs – HBAR/BTC, HBAR/USDT, and HBAR/USDK were added.

In a press release Andy Cheung, OKEx’s Head of Operations, stated:

Hedera and OKEx share the same goal of building a trusted, safe, and fair digital future for everyone through developing a neutral, open-access infrastructure. With such a powerful, enterprise-grade ledger technology, we believe it is a big step forward in mainstream adoption of decentralization. We are excited to support the Hedera platform and continue to lead this industry forward.

To celebrate listing HBAR, the cryptocurrency exchange launched a 500,000 token giveaway that will see holders and market makers who create maker orders on OKEx have a chance to win a share of the HBAR tokens being given away.

The first 5,000 traders to trade a HBAR trading pair, OKEx’s announcement reads, are also entitled to a share of 150,000 of the half a million HBAR being given away, in proportion to the volumes they trade.

Featured Image Credit: Photo via Pixabay.com