Bank of America and Coinbase Ventures Join Paxos as Strategic Investors

Four major strategic investors—Bank of America (BofA), Coinbase Ventures, FTX and Peter Thiel’s Founders Fund—joined Paxos in its April funding round.

Big news this AM! @BankofAmerica @coinbase Ventures @foundersfund & @FTX_Official have invested in our Series D funding round. We’re excited to have industry-leading & innovative players supporting our mission to replatform the global financial system https://t.co/eBhuLhHJ9a

— Paxos (@PaxosGlobal) July 29, 2021

In a funding round led by Oak HC/FT, Paxos raised $300 million at a $2.4 billion valuation. The company’s CEO, Charles Cascarilla, said the fresh financing would allow it to scale the business, including through acquisitions of other industry players.

Paxos provides infrastructure solutions to companies operating in the digital asset and blockchain space. One of the company’s largest clients is PayPal.

In July, media reports indicated that the payments system selected Paxos to manage cryptocurrency assets as part of a new service. Details of the collaboration remain unknown.

Earlier, the company launched the Paxos Crypto Brokerage service, which enables organizations to integrate digital assets into their applications. Its first client was the fintech startup Revolut.

Another major client of the company is BofA. In May, it joined the Paxos Settlement Service blockchain platform, which enables same-day settlement of securities. By comparison, the standard US stock-market settlement takes up to two days.

For commodity trade settlements, Paxos offers the Post Trade service. As of writing, it has processed more than 2 million transactions with a total value of over $3.5 trillion. Its services have been used by more than 250 counterparties.

The company operates the digital asset exchange for institutional investors, ItBit. In 2020, the platform’s trading volume was $3.7 billion — slightly more than 2% of Coinbase’s corresponding figure.

Paxos issues a line of stablecoins, including those pegged to the US dollar. Earlier, it said that Paxos Standard (PAX) and Binance Dollar (BUSD) are fully backed by cash and cash equivalents, as well as U.S. Treasury securities.

Paxos holds a conditional license as a nationally chartered trust bank and plans to obtain a license as a clearing agency. The Binance-issued stablecoin BUSD has been approved by the New York State Department of Financial Services.

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