Pax Dollar (USDP) is a stablecoin issued by Paxos Trust Company, N.A. It is designed to represent one U.S. dollar on a public blockchain and to remain redeemable with its issuer at a one-to-one rate, subject to account eligibility and compliance checks. USDP began as Paxos Standard (PAX) in 2018 and adopted its current name and ticker in 2021.
The word regulated is useful only when it is specific. Paxos operated under a New York limited-purpose trust charter from 2015 through 2025. On December 12, 2025, it converted to a national trust bank supervised by the U.S. Office of the Comptroller of the Currency (OCC). That oversight applies to the issuer and its trust activities. It does not turn USDP into legal tender, a government guarantee or an FDIC-insured crypto asset.
What keeps one USDP close to one dollar?
The peg starts with an issuer promise rather than an algorithm. Paxos states that eligible customers can redeem one USDP for one U.S. dollar. When direct redemption works as intended, a market price materially below $1 can attract buyers who expect to redeem at par, while a price above $1 can encourage new issuance and selling. Those incentives help pull secondary-market prices toward the redemption value.
The mechanism is not a guarantee that every trade will execute at exactly $1. Prices on exchanges and decentralized pools depend on their own liquidity, spreads and demand. A holder without a verified Paxos account may also need to sell through a third party instead of redeeming directly. During market stress, access, fees and settlement time can matter as much as the stated peg.
How minting and redemption change the supply
USDP is created when Paxos accepts dollars from an eligible customer and issues the corresponding number of tokens. The dollars join the assets supporting outstanding USDP. The token can then move between compatible wallets and applications on Ethereum or Solana.
Redemption reverses the process. A customer sends USDP to the redemption address associated with a Paxos account. After the transfer receives the required confirmations and passes compliance review, Paxos credits dollars and the returned tokens are removed from circulation. Paxos's current terms say redemptions are one-for-one, may be rounded down to the nearest cent and may be subject to a minimum tied to bank-wire costs.
What backs USDP?
Paxos's stablecoin terms describe reserves held for stablecoin customers in segregated accounts. Permitted backing includes U.S. dollars held with banks, U.S. government debt, reverse-repurchase agreements collateralized by that debt and money-market funds composed of qualifying government instruments. This is a reserve-backed model: the token does not rely on another crypto asset rising in value to maintain its peg.
Reserve quality and reserve disclosure are separate questions. Paxos publishes independent examination reports on its USDP transparency page. The page also carries a footnote stating that Paxos no longer proactively provides monthly portfolio-composition reports for USDP. Readers should therefore distinguish an independent attestation that reserve value covers supply from a detailed issuer report listing the exact holdings and maturities.
An attestation is useful evidence at a specified reporting time. It is not a continuous audit, a promise that every intermediary is risk-free or insurance against a token holder's own transaction error.
What OCC regulation does—and does not—mean
The OCC's conversion approval identifies Paxos Trust Company, N.A. as an uninsured national trust bank. As a trust bank, Paxos is supervised for activities that include custody, asset safeguarding, governance, compliance and risk management. Paxos says stablecoin reserves are segregated from its corporate funds and held for customers.
This structure can reduce some issuer and insolvency risks, but regulation does not remove every risk. The crypto token itself is not FDIC insured. Paxos explains that some underlying cash deposits may qualify for pass-through deposit insurance only when the legal and record-keeping conditions are satisfied; that protection applies to eligible fiat deposits, not directly to USDP in a self-custody wallet.
Regulation also brings controls. The official USDP contract repository documents upgradeable contract logic and administrative roles. Paxos can pause transfers and freeze or wipe specified balances under its asset-protection powers. These features support sanctions, court orders and security response, but they mean USDP is not censorship-resistant in the way a permissionless base asset can be.
Ethereum and Solana use different contract addresses
USDP is available on Ethereum and Solana. The official Paxos repository identifies the Ethereum proxy contract as 0x8e870D67F660D95D5be530380D0eC0bd388289E1 and the Solana token address as HVbpJAQGNpkgBaYBZQBR1t7yFdvaYVp2vCQQfKKEN4tM. A ticker alone is not enough to identify an asset: unrelated tokens can reuse the name USDP.
Before transferring, compare the full contract address, network and receiving platform's supported deposit route. Ethereum USDP sent to a Solana address, or a look-alike token sent to a legitimate USDP deposit address, may not be recoverable. KTX's deposit and withdrawal standards explain why asset and network compatibility must be checked together.
Where USDP can be useful
| Use | Why USDP may fit | What still needs checking |
|---|---|---|
| Onchain settlement | A dollar-denominated token can move outside banking hours | Network fees, recipient support and finality |
| Exchange quote or collateral | Stable unit for pricing and account balances | Platform rules, liquidity and custody terms |
| Payments and treasury movement | Programmable transfer between approved wallets and applications | Compliance, accounting, redemption access and jurisdiction |
| DeFi activity | Can be supplied to compatible protocols | Smart-contract, liquidity and counterparty risks |
USDP itself does not promise interest. A platform may separately offer rewards or yield, but that introduces another agreement and another risk layer. The return may come from lending, market-making or incentives rather than from the USDP reserve. Users should identify who owes the return and what happens if that intermediary fails.
Eligible readers can create a KTX account to review the stablecoins and network routes available in their region. Confirm support on the live deposit or trading screen before sending funds. The KTX guide to stablecoin issuer permissions provides more background on freezing, blacklisting and other centralized controls.
The main risks are operational as well as financial
- Issuer and reserve risk: the model depends on Paxos safeguarding sufficient high-quality assets and processing redemptions.
- Liquidity risk: a thin market can trade away from $1 even when issuer redemption remains available elsewhere.
- Access risk: direct redemption requires an eligible, verified account and successful compliance review.
- Network and contract risk: wrong-network transfers, copied contract addresses, software bugs or application failures can cause loss.
- Administrative-control risk: authorized roles can pause the contract or restrict balances.
- Regulatory risk: rules, permitted jurisdictions and service availability can change.
A practical review starts with three documents: the current issuer terms, the latest independent attestation and the exact network contract. Then check the venue where the token will actually be held or traded. A regulated issuer can make the reserve and redemption framework clearer; it cannot make every wallet, protocol or secondary market equally safe.
Frequently asked questions
Is USDP always worth exactly $1?
USDP targets $1 through issuer redemption, but its price can move above or below that level on secondary markets. The spread, depth and access to redemption determine how quickly deviations may close.
Is USDP backed by cash only?
No. Paxos's terms allow cash and specified cash-equivalent instruments, including short-term U.S. government obligations, qualifying reverse repos and money-market funds composed of those instruments.
Is USDP insured by the FDIC?
The crypto token is not FDIC insured or guaranteed. Certain underlying fiat deposits may be eligible for pass-through coverage when all applicable conditions are met.
Can anyone redeem USDP directly with Paxos?
No. Direct redemption requires an eligible Paxos account, identity verification and compliance approval. Other holders may need to use a supported exchange or liquidity venue.
Does holding USDP earn reserve income?
No automatic right to reserve income comes with the token. Any yield product is separate from USDP and must be evaluated under its own terms.
For informational purposes only, not financial advice. Stablecoins carry issuer, reserve, custody, smart-contract, liquidity and regulatory risks. Product availability and terms may change.