Stablecoin issuer Paxos sent an email to staff saying it’s cutting its workforce by 65 people or around 20% of its staff. That’s according to The Block and Bloomberg, who viewed a company wide email that Paxos confirmed. The move comes despite a strong balance sheet. Two weeks ago we reported that PayPal received a New York trust charter for digital assets, which it has not yet formally announced. The two pieces of news may be related.
PayPal is a significant client of Paxos. It is the issuer of PayPal’s PYUSD stablecoin, it supports PayPal’s cryptocurrency activities through its ItBit crypto exchange service and provides custody for its crypto assets.
Landing a New York Trust charter means PayPal could handle its own stablecoin issuance and provide custody in-house. The payments giant acquired crypto custody technology firm Curv in 2021.
Paxos previously lost a major client in BINANCE when its regulator instructed it to stop issuing the Binance BUSD stablecoin. That happened in February 2023 with a one year phasing out of the digital currency.
Paxos phases out institutional settlement services
Additionally, Bloomberg reported that a source said Paxos planned to phase out its settlement services for commodities and securities. We confirmed that the services disappeared from the Paxos website around mid-May. Hence, this will account for some of the layoffs.
The securities settlement activities had already been on the back burner for some time because an SEC no-action letter expired in 2021. We believe the SEC application process for securities clearing registration has not progressed.
However, the commodities side was a different story. The solution was used for transactions with a value of more than $10 trillion and over 7.8 million transactions. Participants included Koch, StoneX, ABN Amro, Bank of America, Nomura and Societe Generale, amongst others.
Meanwhile, Paxos CEO Charles Cascarilla said the affected staff had been informed directly. “This allows us to best execute on the massive opportunity ahead in tokenization and stablecoins. With more than $500 million on the balance sheet, we are in a very strong financial position to succeed,” he wrote. Adding, “Stablecoins will 10x in the coming years and serve as the fulcrum for opening the financial system through tokenization.”
In addition to Paxos’ own USDP stablecoin, it recently launched a yield bearing stablecoin USDL from the UAE.
