About Paxos
Paxos is a regulated fintech company specializing in blockchain infrastructure and digital asset management, with a focus on enabling efficient, secure, and transparent movement of assets. Established in 2012 and headquartered in New York, Paxos serves institutional clients globally and has expanded into the European market, introducing services tailored for Eurozone users.
At its core, Paxos issues and manages regulated stablecoins, including both U.S. dollar-pegged coins (such as PAX and BUSD) and, since June 2024, a Euro-backed digital token (EURB) designed for European business and payment use. These stablecoins are fully backed by reserves held in segregated accounts, subject to regular independent audits to ensure transparency and compliance.
Beyond stablecoins, Paxos provides API-driven blockchain infrastructure for asset tokenization, digital wallet creation, and near-instantaneous blockchain-based settlement solutions, targeting institutional use and payment efficiency. The firm’s crypto custody services are built for compliance with demanding security standards, catering primarily to enterprises and financial institutions.
Crucially, Paxos is licensed by the New York State Department of Financial Services (NYDFS) and aligns its offerings with evolving European regulatory frameworks, including AML/KYC and MiCA requirements. Its recent launch of EURB signals a deliberate shift to serve the European market’s growing demand for regulated euro-denominated digital assets, enabling faster cross-border payments and more effective capital deployment. However, as a centralized platform, Paxos users must consider company-centric risks, regulatory shifts, and the evolving liquidity landscape for Euro stablecoins.
Pro's of using Paxos
- Highly Regulated and Transparent: Operates under strict oversight (NYDFS, EU frameworks), offers regular audits, and strong AML/KYC compliance.
- Dedicated Euro Stablecoin (EURB): Enables regulated, blockchain-based euro transactions for European businesses and institutions.
- Robust Security and Custody: Institutional-grade asset custody and comprehensive security standards, reducing counterparty risk.
- Efficient Settlement Solutions: Accelerates and streamlines asset transfers and settlements relative to traditional banking systems.
- Developer and Enterprise Focus: Comprehensive API suite facilitates integration for businesses seeking digital asset solutions.
Con's of using Paxos
- Centralization Risk: Stablecoins and services depend on Paxos’ custody and operational integrity, which may concern users prioritizing decentralization.
- Regulatory Uncertainty: Future changes to EU or US regulatory regimes (such as new MiCA rules) could affect platform offerings or costs.
- Limited Euro Stablecoin Liquidity: EURB is still establishing itself; market adoption and liquidity may lag behind older USD-backed stablecoins.
- Counterparty and Operational Risk: Reliance on the ongoing solvency and compliance of Paxos for token redemption and operational service.
- Potentially Restrictive Access and Fees: Some services may be unavailable in specific jurisdictions, and fee structures may not always be competitive with decentralized alternatives.
What are alternatives for Paxos
- Tether (EURT): A Euro-backed stablecoin with high exchange support, though it is less regulated compared to Paxos.
- Circle Euro Coin (EUROC): Regulated, Euro-denominated stablecoin from Circle (issuer of USDC), with growing European market presence.
- Stasis Euro (EURS): Early Euro stablecoin, regulated in Malta, fully backed and audit-focused, with a European compliance emphasis.
- Crypto.com Euro Stablecoin: Euro-denominated stablecoin with expanding payment and platform integrations and an improving compliance profile.
- USD Coin (USDC) via Euro Onramps: While USD-backed, Circle’s network enables euro-to-USDC onramps and broad liquidity for cross-border Euro transactions.
- Central Bank Digital Currency (Digital Euro - forthcoming): The planned ECB-issued Digital Euro may offer the most regulated and trusted Euro blockchain asset, though it is not yet widely available.