Paxos Reduces Workforce by 20% After New Stablecoin Launch

Paxos, a regulated stablecoin issuer, is laying off 65 employees, amounting to 20% of its workforce. This decision follows the recent launch of Paxos International’s yield-bearing stablecoin, USDL.

Workforce Reduction and Financial Health

Bloomberg reported the layoffs, revealing the information through an email obtained by Olga Kharif. Paxos CEO Charles Cascarilla addressed the layoffs, emphasizing the company’s robust financial position. “This is a tough day. I take responsibility for this decision and regret having to take this course,” Cascarilla stated. He assured employees that Paxos is “in a very strong financial position to succeed.”

Paxos’ Portfolio and Regulatory Compliance

Paxos, based in New York, is known for its regulated stablecoins, including the pax dollar (USDP) and pax gold (PAXG). USDP is pegged to the U.S. dollar, while PAXG is backed by one troy ounce of fine gold. The company also collaborates with PayPal on its stablecoin PYUSD. Until recently, they managed the stablecoin BUSD, but the New York State Department of Financial Services (NYDFS) ordered it to cease minting BUSD.

Expansion and New Initiatives

Despite the layoffs, Paxos continues to expand its offerings. The NYDFS recently authorized them to mint tokens via the Solana blockchain. Additionally, on June 6, Paxos International introduced the lift dollar (USDL), a yield-bearing stablecoin not available in the U.S. and other jurisdictions. In his email, Cascarilla noted the growing adoption of stablecoins but acknowledged that “launching and scaling new regulated tokens takes time.”

TL;DR

The layoffs come at a critical time for the company, as it balances workforce reductions with ambitious new projects. While the launch of USDL signifies a step forward, the company must navigate the challenges of introducing and scaling new regulated tokens. They remain committed to its mission, even as it undergoes significant changes.