While researching different stablecoins, I came across two stablecoins Paxos Standard (PAX) and Gemini USD (GUSD). The purpose of the post is to look into similarity and differences between these two.
- Both stablecoins are built by companies that registered in New York and approved and regulated by the New York Department of Finance (NYDFS).
- As a regulated virtual currency by NYDFS, both are subject to the requirements as imposed by the New York Department of Finance. These requirements states that:
- Ensure that authorized stablecoins are fully exchangeable for a U.S. dollar.
- Implement, monitor and update effective risk-based controls and appropriate BSA/AML and OFAC controls.
- Implement, monitor and update effective risk-based controls to prevent and respond to any potential or actual wrongful use of stablecoin.
- Maintain policies and procedures for consumer protection and to promptly address and resolve customer complaints.
- Both companies have been issued a limited purpose charted by NYDFS.
- Both companies have their holdings audited by a third party audit firm to confirm that the tokens in circulation are backed by equivalent US Dollar amount.
- Both companies have their dollar holdings in a FDIC insured US financial organizations.
- Both have their contract source code available online for public view. PAX source code is available here and GUSD source code is available here.
- Both are ERC-20 token based on Ethereum blockchain.
There are few differences that I would like to point out.
- GUSD have their USD deposits at State Street Bank whereas PAX have their USD deposits in four various US financial organizations.
- Total circulating supply for PAX is 237,866,083 PAX, whereas for GUSD it is only 4,029,624 GUSD.*
- PAX is ranked 32 in terms of market cap. GUSD is ranked 456.*
- GUSD is audited by BPM LLP which is headquartered in San Francisco, CA. PAX is audited by Withum LLP which is headquartered in Princeton, NJ.
Please let me know in comments which stablecoin do you prefer.
* As of Dec 16, 2019 per data from coinmarketcap.com