TL;DR
- Paxos publishes a guide for banks to integrate stablecoins into their operations.
- Stablecoin issuers now hold more U.S. Treasury bonds than several sovereign nations.
- The report proposes four models: own issuance, branded partnership, regulated coin adoption or shared networks.
Paxos published its Stablecoin Strategy Guide for Banks with a direct message: banks no longer need to decide whether to integrate stablecoins, but how to do it. The firm argues the sector has moved past experimentation and entered what it calls a “systems phase,” where stable digital assets function as plumbing for the global financial system, not as niche products.
The report points out that stablecoin issuers collectively hold more U.S. Treasury bonds than several sovereign nations. On that basis, Paxos classifies them as systemically relevant players in debt markets — a data point that reframes the entire institutional adoption debate.
Paxos proposes four participation models
First, the bank issues its own stablecoin under regulated infrastructure. Second, it adopts one under a partner issuer’s brand. Third, it supports already-regulated coins such as PayPal USD (PYUSD) or USDP. Fourth, it joins shared settlement networks for cross-border payments.
At the center of all four paths, the firm places the “regulated trust company” model, which guarantees 1:1 asset backing, bankruptcy remoteness, and risk management standards comparable to bank-grade requirements.
Institutional momentum already moves in that direction
Mitsubishi UFJ Trust and Banking Corp. is preparing stablecoin initiatives for international settlements, and a consortium of nine European banks is working on joint deployments aimed at improving payment efficiency across jurisdictions. At the same time, new launches like USAD — designed for confidential B2B transactions — reflect a trend toward use-case-specific digital dollars rather than a single universal token.
In July 2024, the SEC formally closed its investigation into BUSD without recommending enforcement action, validating the regulated issuance model the company defends. Since then, Paxos expanded its infrastructure footprint, continues issuing PYUSD for PayPal, and acquired digital asset custody provider Fordefi to strengthen its institutional services.
CEO Charles Cascarilla described blockchain infrastructure as a once-in-a-generation opportunity, particularly for smaller banks seeking to compete with larger institutions without building costly proprietary systems from scratch. For Paxos, the competitive risk no longer lies in participation — it lies in standing still.
