WaPo reported on stablecoins and PayPal's move into that area. The answer to question six stated:
BUSD is a stablecoin that was issued by Paxos Trust Co. through a partnership with Binance Holdings Ltd., the world’s largest crypto exchange by volume. In February 2023, New York-based Paxos said that it would stop minting the Binance-branded stablecoin “as directed by” the New York Department of Financial Services. According to a statement by Paxos, the SEC alleged that BUSD is a security and that Paxos should therefore have registered the BUSD offering under the federal securities laws. Paxos said the company “categorically disagrees” with the SEC’s statement. Paxos is also issuing the PayPal stablecoin.
Rumors have the SEC wanting to charge Binance with fraud but are holding off over worries about a "bank run." Paxos is backing all BUSD stablecoins until February 2024 according to its website
All BUSD tokens issued by Paxos Trust have and always will be backed 1:1 with US dollar-denominated reserves, fully segregated and held in bankruptcy remote accounts. BUSD reserves are fully-backed and the instruments held by Paxos in reserve as of close of business February 10, 2023 are also available. Paxos has always prioritized the safety of its customers’ assets. That was true at our founding and remains true today. BUSD will remain fully supported by Paxos and redeemable to onboarded customers through at least February 2024. New and existing Paxos customers will be able to redeem their funds in US dollars or convert their BUSD tokens to Pax Dollar (USDP), a regulated US dollar-backed stablecoin also issued by Paxos Trust.
Carlyle Group co-founder David Rubenstein invested in Paxos in several funding rounds.
The politically connected private equity underwriter (PEU) helped maneuvered Paxos through FTX's implosion, alongside Paxos board member Sheila Bair. Rubenstein interviewed wonder-kid Sam Bankman Fried on this Bloomberg show, providing a platform for SBF to market his wares. Both gentlemen held stakes in Paxos but neither declared those in the interview.
Two months later FTX imploded in a fireball of financial fraud. Rubenstein disclosed SBF asked his family office for FTX funding but said the proposal had a number of holes.
Time will reveal how many holes Binance has. Just know there is a concerted effort to patch up crypto and at least one PEU is orchestrating the resurrection.
Politicians Red and Blue love PEU and increasingly, more are one.
Update 8-10-23: The Federal Reserve is asking banks to be very careful with PayPal's new Paxos issued stablecoin.
Update 8-15-23: Crypto infrastructure firm Prime Trust LLC declared bankruptcy. One of the products they offer is a crypto IRA. Prime Trust used Signature Bank, which imploded in March, for payment and settlement services. The crypto bankruptcy chain continues. How long can Paxos last?
Update 8-21-23: American Banker said:
PayPal and Paxos are not FDIC-insured institutions, and they are not examined or supervised by any federal banking agency. To preserve the stability and integrity of our banking and payments systems, Congress must stop PayPal, Paxos and other nonbanks from issuing stablecoins.
