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Buy Pax Dollar (USDP) in UK With GBP | CoinJar

Pax Dollar

USDP
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£0.000GBP
Figures shown refer to the past. Past performance is not a reliable indicator of future results. Pricing data is provided by CoinJar.
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Overview

#373
Popularity
Stablecoin
Asset type
2018
Active since

What is Pax Dollar?

Why do investors buy Pax Dollars (USDP)? The Pax Dollar, often abbreviated as USDP, belongs to the category of stablecoins.

A stablecoin is a cryptocurrency that is “pegged” to an asset considered stable, like gold or a fiat currency, like the Euro or the US Dollar. The primary purpose of stablecoins is to provide stability in an otherwise volatile cryptocurrency market.

How USDP Works

USDP is issued by Paxos Trust Company, a financial institution. Paxos Trust Company holds a charter from NYDFS, ensuring compliance with US financial regulations. It is backed one-to-one by US Dollars.

For every USDP in circulation, Paxos says that there is an equivalent US Dollar held in reserve by them. This parity ensures the stability of the USDP, shielding it from the erratic price movements common in the crypto market.

USDP operates on blockchain technology, the same decentralised, distributed ledger system that underlies cryptocurrencies like Bitcoin and Ethereum.

USDP can be used for various financial transactions, like trading on cryptocurrency exchanges, buying things, and as a form of savings.

Stability and Protection

The Paxos Trust Company aims to ensure that Pax Dollars are fully backed by cash and cash equivalents, maintaining a 1:1 peg to the US dollar.

This stability makes them an attractive choice for risk-averse investors. Unlike volatile cryptocurrencies, USDP offers a reliable store of value, especially during market downturns.

Instant Redemption

If you ever need to convert your USDP back to US dollars, you can do so instantly through Paxos. This allows investors to move seamlessly between crypto and fiat.

Competitive Transaction Costs

Traditional banking systems often charge hefty fees for cross-border transactions. In the USDP Whitepaper, they say, “Pax Dollar essentially could remove cross-border transaction fees, allowing commerce and trade to occur more fluidly. This improvement alone to the current system could unlock billions in foreign exchange fees.”

Whether users are sending money to family overseas or conducting business internationally, USDP can save users money on transaction fees.

Hedging Against Volatility

Cryptocurrencies are notorious for their price volatility. By holding Pax Dollars, users can hedge against sudden market swings. When the crypto market experiences turbulence.

Conclusion

In summary, Pax Dollars combine the advantages of blockchain technology and the stability of fiat currency. Paxos Standard is a stablecoin that aims to maintain a 1:1 peg to the US dollar.

CoinJar has been operating since 2013. CoinJar keep the vast majority of customer assets in cold storage or private multi-sig wallets and maintain full currency reserves at all times.

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Frequently asked questions

What are Pax Dollars (USDP)?

Pax Dollars (USDP) are a stablecoin issued by Paxos Trust Company. They are designed to maintain a 1:1 peg with the US dollar, providing stability in the volatile crypto market.

How can I buy Pax Dollars (USDP)?

You can buy USDP through various methods:

Bank Transfer: Transfer fiat currency (such as US dollars) from your bank account to an exchange that supports USDP.*

Credit Card: Some exchanges allow you to purchase USDP directly using your credit card.

What is an ERC-20 Token?

An ERC-20 token is a standard for creating fungible tokens on the Ethereum blockchain. USDP is an example of an ERC-20 token.

Are Pax Dollars a Digital Asset?

Yes, USDP is considered a digital asset because they exist in digital form on the blockchain.

Who regulates Pax Dollars?

Pax Dollars (USDP) are regulated by the New York State Department of Financial Services (NYDFS). Paxos Trust Company holds a charter from NYDFS, ensuring compliance with US financial regulations.

What is the market cap of Pax Dollars?

The market capitalisation (market cap) of Pax Dollars represents the total value of all USDP tokens in circulation. It is calculated by multiplying the current price of USDP by the total supply.

How quickly can I transfer Pax Dollars?

Pax Dollars transactions are typically processed within 24 hours, making them suitable for timely transfers.

What role do smart contracts play in Pax Dollars?

Smart contracts on the Ethereum blockchain facilitate the creation, issuance, and management of Pax Dollars. These contracts ensure transparency and automate processes.

What are cash and cash equivalents?

Pax Dollars are fully backed by cash and cash equivalents, meaning that for every USDP token issued, there is an equivalent amount of US dollars held in reserve.

Who founded Paxos Trust Company?

Paxos Trust Company was co-founded by Charles Cascarilla and Rich Teo. They established the company to bridge the gap between traditional finance and the crypto world.

Standard Risk Warning: The above article is not to be read as investment, legal or tax advice and it takes no account of particular personal or market circumstances; all readers should seek independent investment advice before investing in cryptocurrencies. The article is provided for general information and educational purposes only, no responsibility or liability is accepted for any errors of fact or omission expressed therein. Past performance is not a reliable indicator of future results. We use third party banking, safekeeping and payment providers, and the failure of any of these providers could also lead to a loss of your assets. We recommend you obtain financial advice before making a decision to use your credit card to purchase cryptoassets or to invest in cryptoassets. Capital Gains Tax may be payable on profits. CoinJar's digital currency exchange services are operated in the UK by CoinJar UK Limited (company number 8905988), registered by the Financial Conduct Authority as a Cryptoasset Exchange Provider and Custodian Wallet Provider in the United Kingdom under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, as amended (Firm Reference No. 928767). In the UK, it's legal to buy, hold, and trade crypto, however cryptocurrency is not regulated in the UK. It's vital to understand that once your money is in the crypto ecosystem, there are no rules to protect it, unlike with regular investments. You should not expect to be protected if something goes wrong. So, if you make any crypto-related investments, you're unlikely to have recourse to the Financial Services Compensation Scheme (FSCS) or the Financial Ombudsman Service (FOS) if something goes wrong.

The performance of most cryptocurrency can be highly volatile, with their value dropping as quickly as it can rise. Past performance is not an indication of future results. Remember: Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more at: https://www.coinjar.com/uk/risk-summary. UK residents are required to complete an assessment to show they understand the risks associated with what crypto/investment they are about to buy, in accordance with local legislation. Additionally, they must wait for a 24-hour "cooling off" period, before their account is active, due to local regulations. If you use a credit card to buy cryptocurrency, you would be putting borrowed money at a risk of loss. We recommend you obtain financial advice before making a decision to use your credit card to purchase cryptoassets or to invest in cryptoassets.

Specific risks associated with DeFi tokens Decentralised Finance (or 'DeFi') tokens (e.g. UNI, AAVE) are crypto-assets linked to financial applications and protocols built on decentralised blockchain technology. DeFi tokens carry the following risks:Smart contract risk: DeFi relies heavily on smart contracts. Even a minor coding error or oversight can lead to a contract being exploited, potentially resulting in significant losses for DeFi tokens. Regulatory risk: DeFi operates in a decentralised manner, often without intermediaries or financial crime controls. Regulatory bodies across jurisdictions might introduce new regulations impacting the use, value, or legality of certain DeFi protocols or assets. Rug-pulls / Exit scams: Some DeFi projects might be launched by anonymous or pseudonymous teams, increasing the risk of "rug pulls" where developers abandon the project and withdraw funds, leaving investors with worthless tokens. Data/oracle risk: DeFi protocols often rely on external data sources or 'oracles. Manipulation or inaccuracies in these data sources can lead to unintended financial outcomes within the protocols. Protocol complexity: The complexity of some DeFi protocols can make it difficult for average users to fully understand the mechanisms and associated risks.

Specific risks associated with meme coins: 'Meme coins' (e.g. DOGE, SHIB, PEPE) are crypto-assets whose value is driven primarily by community interest and online trends. Meme coins carry the following risks: • Volatility risk: Meme coins can have extreme price volatility, often experiencing rapid and unpredictable price fluctuations within short periods. The value of meme coins can be influenced by social media trends, celebrity endorsements, and other factors unrelated to traditional investment fundamentals. • Lack of utility: Meme coins often lack intrinsic value or utility, being primarily driven by community interest, online trends, and speculative trading. • Market manipulation: Meme coins may be susceptible to increased risk of market manipulation including 'pump-and-dump' schemes, where the price is artificially inflated followed by a sudden crash. • Lack of transparency: Meme coins may have limited available information about their development teams, goals, and financials. This lack of transparency can make it challenging to assess the credibility and potential of a meme coin accurately. • Emotional investing: Meme coins often garner strong emotional reactions from investors, leading to impulsive decisions. Emotional trading activity can amplify losses.

Specific risks associated with stablecoins: There is a risk that any particular stablecoin may not hold their value as against any fiat currency; or may not hold their value as against any other asset. Stablecoins carry the following risks: · Depegging events: Depegging events may occur with stablecoins that fail to maintain adequate controls and risk mitigants. A depegging event is when the value of the stablecoin no longer matches the value of the underlying asset. This could result in a loss of some or all of your investment. • Counterparty risk: Counterparty risk arises when an asset is backed by collateral, involving a third party maintaining the collateral, which introduces risk if the party becomes insolvent or fails to maintain it. • Redemption risk: Redemption risk refers to the possibility that an asset's ability to be redeemed for underlying collateral may not be as anticipated during market fluctuations or operational issues. • Collateral risk: Collateral risk refers to the possibility of the collateral's value declining or becoming volatile, potentially impacting the asset's stability, particularly when it is another crypto-asset. • Exchange rate fluctuations: Stablecoins, often denominated in US Dollars, expose investors to fluctuations in the USD:GBP exchange rate. • Algorithmic risk: Algorithm risk refers to the possibility of an asset's stability being compromised due to unexpected failure or behaviour of the underlying algorithm, potentially leading to loss of value.

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