Paxos is regulated by the New York Department of Financial Services as a Limited Purpose Trust Company. This is the highest level of oversight in cryptocurrency markets available today, and we take this regulation very seriously. Importantly, NYDFS oversees both our company and our products. Very few operators in digital assets have the rigorous oversight that Paxos has pursued.
Today, Paxos issues two US dollar-backed stablecoins – Pax Dollar (USDP) and Binance USD (BUSD) – that are overseen by the NYDFS. These two tokens are very similar in design and reserve operations because they are regulated. Paxos and NYDFS agreed to the terms of the token in advance of issuing – this includes the stipulation that USDP and BUSD only be issued by Paxos on the ethereum blockchain at this time.
Our marketing partner for BUSD – Binance – issues a token on its BNB smart chain called Binance-Peg BUSD. More information on how Binance creates Binance-Peg BUSD can be found on Binance’s website here. Note that Binance-Peg BUSD is strictly a Binance product; it is not issued by Paxos nor regulated by the NYDFS.
It is always crucial to do your research when you jump into the digital asset ecosystem. Technology has created countless opportunities for new financial products to enter the market. There are benefits and risks associated with every product, which is why you should understand the design, nuances and differences of any asset you acquire.