By
Temitope Olatunji
April 19th, 2024
The leading stablecoin Tether is challenged by PAX which has seen growth lately and has a market capitalisation of $41.94 million.
With the development of digital technologies, investors have more and more opportunities to pump money into various projects. Currently, the crypto market sees the growing interest in stablecoins — cryptocurrencies pegged to a stable asset, such as gold or fiat currencies. While not any exchange is ready to trade this kind of currency, some are enhancing popularity of stablecoins by adding support for them. The prime example is Binance which is actively looking to list more stablecoins in addition to the three it already supports.
Until recently, USDT issued by Tether Limited was stablecoin number one. But now its status is experiencing challenge, as other stablecoins are entering the crypto arena. Over 50 active stablecoin projects have already emerged around the world, and more are expected to debut.
Recently, Tether experienced a downturn, followed by a sudden investor exodus that took more than $300 million out of the market. At the moment of writing, the price of USDT makes up $0,98 per coin, which is 0,11% lower than 24 hours ago. Tether has quite a controversial nature, that’s why not all crypto enthusiasts are ready to trust this coin.
New Leaders in the Stablecoin Sprint
Currently, arch-rival of Tether is Paxos Standard’s PAX coin which is pegged to the US dollar and uses the Ethereum ERC20 protocol.
Paxos Standard (PAX) was created by Paxos, a financial technology company on a mission to modernize finance by mobilizing assets at the speed of the internet. Paxos was the first virtual currency company to receive a charter from the New York State Department of Financial Services. Launched in September of this year, PAX is fully collateralized 1:1 by the U.S. dollar.
Charles Cascarilla, CEO and co-founder of Paxos, said:
“Paxos Standard gives financial markets the power to transact in a fully USD-collateralized asset with the benefits of blockchain technology and oversight from financial regulators. We believe that Paxos Standard represents a significant advancement in digital assets, leveraging the oversight and stability of the traditional financial system and enabling a frictionless global economy…In the current marketplace, the biggest hindrances to digital asset adoption is trust and volatility. As a regulated trust with a one-to-one dollar-collateralized stablecoin, we believe we are offering an asset that improves on the utility of money.”
Recently, Paxos Stable token was added to OKEx and Huobi. The stablecoin offers all the Tether’s capabilities plus decentralised accounting function and the supervision of financial regulators as a fully regulated asset, that’s why some experts see PAX as a major alternative to USDT.
Being the leading stablecoin of the chasing pack behind Tether, PAX is currently traded at $1,01 and has a market capitalisation in the amount of $41.94 million, according to CoinMarketCap. Over the seven day period of time, Paxos Standard Token is -3.16 percent against the USD.
Tether still has a market capitalisation of $2 billion, which is several times more than its nearest challenger. However, Pax has all chances to catch up the leading stablecoin, well, time will show.