Binance Adds Paxos (PAX) Pairs as Stablecoin Increases Influence
Binance recently launched a general stablecoin market, mixing the influence of Tether with newer stablecoins.
Binance has extended the options for the stablecoins it holds by adding new pairs for Paxos (PAX), one of the more recently created, fully backed stablecoins. From Tuesday onward, Binance will host the PAX/TUSD, USDC/TUSD, and USDC/PAX trading pairs.
PAX has become one of the more significant stablecoins of late as its dollar-backing is especially robust. The coin now makes up 1.73% of all trading volumes and was quickly accepted on multiple exchanges. Its popularity comes from the possibility of directly cashing out to dollars.
PAX is only surpassed by the Gemini Dollar (GUSD), which sees higher trading volumes based on the GDAX exchange.
With the highest liquidity, Tether (USDT) remains the leading stablecoin, and its supply traded more than twice over in 24 hours. However, directly cashing out USDT is impossible because withdrawals from the Tether wallet are locked.
PAX trades in a total of 59 pairs, but the most active ones allow for switching between USDT and PAX. This has led to relatively large withdrawals, which the Paxos team has managed to honor so far.
However, certain users have seen their accounts suspended because of suspicious activity. The project team explained that so far, less than 2% of Paxos transactions have seen suspicious activity.
“As a regulated financial institution, we have to be very careful about screening customer activity to ensure that users are not doing anything fraudulent, and when one customer is using 30+ accounts under different names in one day, it's very obviously suspicious behavior,” a Paxos representative explained in an emailed statement to Cryptovest.
The recent withdrawals into US dollars made the PAX supply fall significantly in the past month, plunging from over 175 million coins to around 80 million. However, PAX allows for the creation of new coins if funds flow into the ecosystem. Even if fully legal and dollar-backed, the supply is not enough to support a large-scale exodus from the markets. The possibility to withdraw funds is relatively small compared to the size of the market.