TLDR
- Paxos, a stablecoin issuer, has laid off 65 employees, representing about 20% of its workforce.
- The layoffs come as Paxos focuses on launching and scaling new regulated tokens, particularly in the areas of tokenization and stablecoins.
- Paxos lost a significant source of revenue when it stopped issuing the Binance-branded BUSD stablecoin due to regulatory pressure.
- Despite the layoffs, Paxos claims to be in a strong financial position with more than $500 million on its balance sheet.
- Paxos plans to phase out its settlement services in commodities and securities to concentrate more on asset tokenization and stablecoins.
Paxos, a prominent stablecoin issuer, has announced a significant reduction in its workforce, laying off 65 employees, which amounts to approximately 20% of its staff.
The decision, communicated to employees via an email from CEO Charles Cascarilla, comes as the company shifts its focus towards launching and scaling new regulated tokens, particularly in the areas of tokenization and stablecoins.
The layoffs occur at a challenging time for Paxos, as the company recently lost a major source of revenue when it was forced to stop issuing the Binance-branded BUSD stablecoin due to pressure from U.S. regulators.
The BUSD stablecoin, which had a market cap of $16 billion at its peak, was phased out in early 2023 after the New York Department of Financial Services intervened.
Despite the setback, Paxos remains optimistic about its future prospects. In the email to employees, Cascarilla emphasized that the company is in a “very strong financial position to succeed,” with more than $500 million on its balance sheet.
He added that the reduction in headcount “allows us to best execute on the massive opportunity ahead in tokenization and stablecoin.”
Paxos currently issues a stablecoin branded by PayPal and offers the Lift Dollar (USDL) through one of its affiliates in the United Arab Emirates.
The company’s focus on regulated stablecoins and tokenization is expected to drive growth in the coming years, with Cascarilla stating that “stablecoins will 10x in the coming years and serve as the fulcrum for opening the financial system through tokenization.”
As part of its strategic shift, Paxos plans to gradually phase out its settlement services in commodities and securities. These services, which had been used for transactions worth more than $10 trillion and over 7.8 million transactions, will be discontinued to allow the company to concentrate more on asset tokenization and stablecoins.
Paxos has offered affected employees a comprehensive severance package, including 13 weeks of severance pay, three months of subsidized health insurance, three months of outplacement support, and a two-year extension to exercise vested options.
The company has also provided second-quarter bonuses to those who were on a quarterly incentive program and payments and benefits to anyone with approved parental or medical leave.
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