Paxos Trust Company is a regulated blockchain infrastructure firm and New York State-chartered trust company, founded in 2012 by Charles Cascarilla (CEO) and Rich Teo. Paxos is one of the most regulated crypto entities in the U.S., holding a NYDFS (New York Department of Financial Services) trust charter that allows it to issue regulated stablecoins and custody digital assets under the same framework as a bank trust department. Paxos is best known as the issuer of USDP (Pax Dollar) and PYUSD (PayPal USD) stablecoins, and for its Paxos Settlement Service used by major brokerages.
Background
Charles Cascarilla co-founded Paxos with a vision of bringing regulated financial infrastructure to blockchain. The company obtained its NYDFS trust charter early — before most crypto firms had any regulatory license — which gave it the legal standing to issue dollar-backed assets that are 1:1 redeemable. Paxos became the backend infrastructure provider for a surprising number of TradFi and consumer fintech companies wanting to add crypto without building compliance infrastructure themselves.
Key Products
| Product | Description |
|---|---|
| USDP (Pax Dollar) | Regulated USD stablecoin; 1:1 backed by cash and short-term Treasury bills |
| PYUSD (PayPal USD) | USD stablecoin issued by Paxos on behalf of PayPal; one of the largest regulated stablecoins |
| PAXG (PAX Gold) | ERC-20 token backed 1:1 by London Good Delivery gold bars in Brink’s vaults |
| itBit Exchange | NYDFS-licensed crypto exchange; also provides institutional OTC trading |
| Paxos Settlement | T+0 blockchain-based settlement infrastructure for equities and other assets |
| Crypto Brokerage API | Backend for enabling crypto buying/selling in consumer apps |
PYUSD and PayPal Partnership
In August 2023, Paxos and PayPal launched PYUSD — the first stablecoin issued by a major U.S. financial institution. Paxos issues and redeems PYUSD, manages the Reserve, and provides the blockchain infrastructure. PayPal distributes PYUSD through its consumer app to its 400M+ user base. PYUSD is available on Ethereum and Solana.
Regulatory Note
In February 2023, Paxos received a Wells Notice from the SEC regarding its issuance of BUSD (Binance USD), which it had been issuing on behalf of Binance. Paxos ceased minting new BUSD as a result. This distinguished Paxos from Binance in regulatory perception — Paxos complied immediately with regulators while BUSD was wound down.
Related Terms
Sources
- Paxos Website — products and regulatory filings.
- NYDFS Paxos Page — trust company charter documentation.