Paxos, a New York-based blockchain company, announced on Tuesday that the stable coin had been changed from the “Paxos standard” to “one person or more dollars” and that the token’s symbol would be the USDP.
“the USDP ticker more easily identifies the US dollar as a token supported by the US dollar … As a USDP, everyone will be able to recognize our token as a stable coin immediately, ” Walter Hessert, chief strategy officer at paxos, wrote on his blog.
The announcement comes as Paxos struggles to draw attention to the highly competitive stable coin market dominated by Tether, a controversial overseas coin popular with traders, and USDC, a decidedly stable coin in the US backed by Coinbase and Circle.
Stable coins, as the name suggests, are digital tokens that bypass the volatility of other cryptocurrencies. They aim to maintain a 1-on-1 bond with a national currency such as the dollar, although the mechanism for how that link should work has been a topic of contentious debate in recent weeks.
Paxos has long declared that the US dollar is now the safest of stable coins because the company has created reserves consisting entirely of US dollars or short-term Treasury bills. This is in contrast to tether, for example, which holds most of its reserves in commercial Securities and other assets.
In theory, Tether could sell these assets for dollars if a large number of customers wanted to buy their stable coins. But in practice, the outcome would probably be quite different, especially in times of crisis.
As financial experts tell decrypt, Tether will have to sell its assets at a loss in the midst of the crisis—or they won’t be able to resolve them at all-which could cause the value of the stable coin to plummet as customers realise there is no bond over the dollar.
Circle’s fixed cash is held “entirely” in US Treasuries
Earlier this month, Paxos ‘ lead lawyer said on his blog that usdc Circle is not a real stable coin
