Binance CEO Changpeng “CZ” Zhao announced this week that the exchange will soon list the PAX stablecoin, which is fully collateralized 1:1 by the U.S. dollar and issued by the Paxos Trust Company, as an alternative to the controversial Tether (USDT).
For people who complained about lack of audit on USDT, here is another alternative. As always, make sure you understand what it is before you buy. https://t.co/SoHPtvwWU9
— CZ Binance (@cz_binance) September 27, 2018
After a flurry of independent research reports, controversy struck Tether as investors and regulators began to question whether the company’s stablecoin is actually backed 1:1 with USD.
While Tether released a report in June that detailed a third-party audit of their holdings and even recently appointed Leonardo Real, the former AML quality control manager at the Bank of Montreal, as Chief Compliance Officer (CCO), the prevailing sentiment points to a lack of trust toward the company’s activity, leaving an opening in the market for emerging players.
Notably, Paxos is fully-regulated under the authorities in the state of New York, and the Paxos Trust Company is also licensed with the SEC. However, some market analysts are concerned with Paxos’ control over PAX that the regulations require.
“We may freeze, temporarily or permanently, your use of, and access to, PAX or the US dollars backing your PAX, with or without advance notice, if we are required to do so by law, including by court order or other legal processes,” reads the legal documentation for the stablecoin.
Binane notes that trading for a PAX/BNB trading pair will open on September 29 at 10:00 AM (UTC).
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.