With its new Fiat Gateway service, Paxos said Tuesday that users will be able to execute simple swaps between U.S. dollars and stablecoins, including the firm’s own Paxos Standard (PAX).
Regulated blockchain company Paxos has launched a product allowing crypto exchange customers to more easily fund their accounts with traditional money.
Notably, Binance, the world’s largest cryptocurrency exchange by trading volume, will be the first to integrate the product. The firm will also have its stablecoin, Binance USD (BUSD), included in the swap options.
“Paxos is a trusted partner that keeps innovating ways to make traditional and digital assets more interoperable. The new Fiat Gateway is the fastest, simplest U.S. dollar on/off ramp for our customers. We look forward to working more closely with Paxos to integrate additional solutions,” said Changpeng “CZ” Zhao, Binance’s CEO.
Binance may work with Paxos to integrate additional solutions in future, CZ said, though he didn’t provide any specifics. The exchange has only recently started adding fiat funding options, having launched deposits in rubles, euros and other currencies in recent weeks.
While Paxos’ Fiat Gateway will facilitate swaps between fiat currency and stablecoins, the company announced a second offering called Stablecoin Swap that allows fee-free 1:1 interoperability between Paxos-powered stablecoins.
Both of Paxos’ new services can be integrated into third-party platforms via an application programming interface (API). Previously, these facilities were available only for customers using Paxos.com.
“The APIs will help our technology can become more widely available and scalable,” said Charles Cascarilla, Paxos CEO and co-founder.
Notably, the U.S. Securities and Exchange Commission granted Paxos Trust Company no-action relief in October, allowing it to settle equity securities trades on its blockchain platform for broker-dealers. Credit Suisse and Société Générale would be the first two companies to utilize the service, Paxos announced at the end of last month.
Binance Adds 15 Fiat Currencies as Exchange Pushes Global Expansion
The Malta-based cryptocurrency exchange announced Friday that users can now purchase cryptocurrencies with a longer list of supported fiat currencies through its integration with Israeli fiat payments processor Simplex.
The new integration provides gateways for currencies including the Swiss franc, Korean won and Australian dollar, as well as the Polish zloty and South African rand. Currencies that have already been made available through Binance’s fiat-to-crypto trading facility, such as pound sterling and Russian ruble, are also now supported through Simplex.
Developers confirmed the integration was fully operational by Thursday afternoon.
Supported fiat currencies will be paired with Binance’s base cryptocurrencies – the assets the exchange uses for its default trading pairs. These currently include bitcoin (BTC), ether (ETH), XRP (XRP), as well as some selected fiat currencies, including the U.S. dollar and the Nigerian naira.
Data collected for CoinDesk suggest fiat volumes make up only a tiny fraction of Binance’s trading activity. With 30-day average daily volumes at around $3.55 billion, only $3.5 million of that was in fiat.
As the graph below highlights, the vast majority of this volume has been in U.S. dollars since a gateway for the currency was opened. As Binance folds some of its supported currencies into U.S. dollars, it isn’t certain if end users are entirely behind all of Binance’s dollar volume.
Simplex first partnered with Binance in January 2019, allowing users to purchase cryptocurrencies with credit and debit card payments denominated in euros, U.S. and Canadian dollars, and Japanese yen.
Although Simplex charges a 3 percent fee – plus a $10 flat fee for any purchases below $200 – it is designed to be cheaper than paying straight from a bank or card provider, which usually levy an additional three percent FX fee on top of any other fees charged for a fiat-crypt swap.
Encouraging users to trade in their local currency could enhance Binance’s global appeal. In October, CEO Changpeng Zhao said the company had integrated Russian rubles into the platform after describing the country as one of their key markets. On Thursday, the exchange announced it had hired a former Uber product lead to begin building a range of services specific to local markets.