Paxos has been at the forefront of crypto and blockchain technology since the market’s inception. However, Paxos was also founded with a deep understanding of and expertise in traditional financial services. 

That expertise is clear in the most recent episode of Blockworks’ Empire Podcast where Paxos CEO and Co-Founder Charles Cascarilla sits down with Jason Yanowitz to discuss current macroeconomic conditions and how market volatility is reflected in crypto markets today. 

Charles started his career in financial services equity research, where he built a deep understanding of the trading venues, service providers, institutions and financial products. He then shifted focus and became an investor in financial services companies. Throughout the 2008 financial crisis, he ran an asset management firm and acutely understood the interconnectedness of the market and the risks inherent in the system. He learned about the potential of crypto early in 2010 and saw how blockchain could revolutionize the financial system – and ultimately solve challenges that the 2008 crisis exposed. 

Here are a few key insights from his discussion with Jason: 

On why Charles believes Paxos is poised for growth, despite market volatility and uncertainty…

• “You have to prove your business through a business cycle – that’s the whole point. It’s not a business model if it only works when assets go up and prices go up. The whole point is that a business model works through the cycle. If you cannot work in the downside, then that’s not working, that’s just pretending.”

On the current landscape of stablecoins…

• “It’s important to define stablecoins because they’re not all the same. To me, a stablecoin is a tokenized asset. The asset used to be on a centralized database, and now it’s on a decentralized database. It’s still the asset. In the case of Tether, they’re not totaling T-Bills and tokenizing the T-Bill, they’ve tokenized a liability of Tether and they hold a bunch of assets that fluctuate in value and say it’s always worth a dollar. That’s called a bank. Paxos only tokenizes T-Bills with an average maturity of less than 30 days.”

On how Paxos stablecoins are different…

• “Paxos has created a digital dollar, not a digital representation of a dollar. What’s more important, we have a primary prudential regulator – the NYDFS – and they oversee our token and the Trust company to make sure all the reserves are held bankruptcy remote and fully segregated. If Paxos fails, you still have a dollar. It’s not meant to be a sexy business, it’s about financial innovation.”

On Paxos’ overall mission…

• “We’re trying to replatform all the assets in the financial system. There’s $700 trillion in assets in the global system. It’s important to have tokenized dollars because they are the lifeblood of the system.”