Blockchain Adds PAX Stablecoin to Mobile Wallet

Leigh Cuen
May 31, 2019 at 10:20 UTC
Updated Jun 2, 2019 at 03:20 UTC
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One of the cryptocurrency industry’s most popular wallet providers, Blockchain, is adding support for the dollar-pegged stablecoin PAX to its mobile wallets this week as part of a broader strategy to grow usage.

The general manager of Blockchain’s wallet product, Xen Baynham-Herd, told CoinDesk the company eventually plans to enable fiat redemptions as well, through upcoming partnerships. Charging small fees on such swaps is how the startup turns a profit.

“Doing the stablecoin project here with PAX is a really big deal because it’s not just that we are adding a new asset, it’s adding a true dollar balance into the wallet,” Baynham-Herd said of the company’s first stablecoin integration, adding:

“Anyone with an internet connection can download a wallet and get USD funds, essentially. … People everywhere can now have access to all sorts of assets the same way they can access all sorts of information.”

By Monday, users will already be able to swap assets like bitcoin, ether or stellar for PAX within the wallet itself.

While Baynham-Herd declined to say when fiat and traditional assets might be scheduled to arrive, demand for such offerings is already starting to percolate. PAX issuer Paxos, a New York-based startup, also has a commodities-focused operation near Blockchain’s London headquarters.

Paxos CEO Chad Cascarilla told CoinDesk the company’s blockchain-based precious metals trading system has already settled $700 billion worth of trades with 55 institutions since it launched roughly 10 months ago. In the near future, Paxos will also launch a new, gold-pegged asset called Pax Gold, which can be redeemed for physical bars of gold from a London warehouse.

Baynham-Herd said Blockchain is open to exploring options like Pax Gold, in addition to other stablecoins beyond PAX, because it will allow traditional assets to transcend national borders the way bitcoin already does. Such partnerships could have widespread implications for retail users.

Stepping back, Blockchain’s wallets account for 22 percent of all on-chain bitcoin transactions, according to a tweet by Blockchain CEO Peter Smith. Yet the ways Blockchain collects demographic information about these transactions is considered, by some, to be controversial.

Global distribution

Baynham-Herd said there are roughly 38 million wallet signups and millions of active monthly users, more than half of whom are located outside the United States. Baynham-Herd said Russia, Nigeria, Brazil and Argentina are home to some of the company’s largest user bases.

Like many wallet providers, Blockchain wallets aggregate IP information based on the users’ internet connection. Blockchain also provides optional know-your-customer (KYC) verification for users who want in-wallet trading capabilities or access to perks like the stellar airdrop last November. The company says it now verifies “tens of thousands of KYC users per day.”

Bitcoin advocate Udi Wertheimer told CoinDesk he would prefer Blockchain to prioritize Tor integrations and encourage users to do KYC with new accounts instead.

“Potentially linking years of bitcoin activity to real-world identity just to get $5-worth of stellar doesn’t bode well for the privacy of end-users,” Wertheimer said.

Speaking to this criticism, Baynham-Herd said: “We only collect very minimal information on users.”

In the meantime, a company spokesperson said Blockchain is hiring aggressively, growing from roughly 60 employees to around 150 over the past year and looking for nearly 50 more positions this summer.

“We’re always hiring,” Baynham-Herd confirmed, adding:

“Engineers, product, trading-related positions, the whole spectrum.”

Blockchain CEO Peter Smith image via CoinDesk archives