Fireside: Paxos' Chad Cascarilla

Paxos CEO Chad Cascarilla dropped major revelations at Breakpoint 2025, announcing the company has submitted an application to the SEC to become a clearing agency for stocks and bonds—a move that could fundamentally reshape how traditional securities are held and traded globally. With $900 trillion in traditional assets waiting to move on-chain, Cascarilla painted a vision where stock trading volume could grow from $250 billion daily to $2.5 trillion within the next five to ten years.

Summary

Chad Cascarilla, founder and CEO of Paxos—a company that predates Ethereum—shared his perspective on the convergence of traditional finance and blockchain technology at Breakpoint 2025. The conversation covered everything from white-label stablecoin strategies to the company's recent acquisition of institutional wallet company Fortify, signaling a serious push into institutional DeFi access.

The discussion revealed that USDG, Paxos's global dollar stablecoin, has grown to approximately $1.5 billion in circulation, with the last quarter showing 2.5x growth. The stablecoin has achieved listings on every major exchange and integration with payment giants including Visa, MasterCard, and Stripe. Cascarilla predicted that while hundreds or thousands of white-label stablecoins will emerge, only two to five will become true global rails—similar to how only a handful of payment networks dominate the credit card market.

Perhaps most significantly, Cascarilla revealed that Paxos previously settled real U.S. equity trades through a no-action letter from the SEC, working with major institutions including Bank of America and Credit Suisse. While that program paused under the previous SEC administration, the company has now applied to become an SEC-registered clearing agency, which would allow them to custody stocks and bonds and issue them natively on-chain.

Key Points:

The $900 Trillion Opportunity

Cascarilla emphasized that approximately $900 trillion in traditional assets remain off-chain, representing an enormous opportunity for tokenization. Paxos was built specifically to solve this problem—creating a bridge between traditional finance and blockchain technology. The company's approach goes beyond stablecoins to encompass all asset classes, using their wallet infrastructure to enable broader adoption of traditional assets in on-chain environments.

This migration isn't just about efficiency gains; it's about fundamentally changing how assets operate. By moving traditional assets on-chain, they can operate in a more decentralized, open, and transparent manner. The recent passage of the Genius Act provides a regulatory framework that Paxos has followed for seven to eight years, creating common standards that will help build trust and oversight in the stablecoin space.

Tokenized Equities and the SEC Application

In a significant revelation, Cascarilla confirmed that Paxos has submitted an application to the SEC to become a clearing agency—essentially a depository for stocks and bonds. If approved, this would allow Paxos to hold securities and issue them natively on-chain, where holders would own the actual underlying asset rather than a derivative instrument.

This approach mirrors how Paxos handles gold through its Pax Gold product, which currently holds approximately $1.4-1.5 billion in vaulted gold in London. Token holders own the actual gold bars and can even look up the serial number of their specific bar—a model Cascarilla believes should extend to all traditional assets including equities. The key distinction is ownership of the underlying asset rather than adding layers of leverage and counterparty risk through derivatives.

Stablecoin Market Structure and White Labels

Cascarilla outlined a clear vision for how the stablecoin market will evolve. He predicts two to five major stablecoins will serve as global rails, while hundreds or thousands of white-label versions will exist for specific communities and use cases—analogous to how rewards cards and branded credit cards proliferate while only a handful of actual payment networks exist.

For companies considering white-label stablecoins, Cascarilla offered practical advice: unless you genuinely believe you're building a global rail, piggyback on existing liquidity and infrastructure. Getting accepted across all payment networks, exchanges, collateral frameworks, and DeFi protocols is simply not feasible for most issuers. The alternative is to control the user interface and branding while using established stablecoins like USDG underneath.

USDG Growth and Economics

The USDG stablecoin has reached approximately $1.5 billion in circulation, with 2.5x growth in the most recent quarter. The token is now listed on every major exchange, accepted as collateral on platforms including OKX and Kraken, with Bybit recently joining the ecosystem. Payment integration extends to Visa, MasterCard, and Stripe.

USDG's unique economic model returns all interest to distributors rather than retaining it—Paxos keeps only an asset management fee. Additionally, participants don't just earn on their own balances; they benefit from helping grow the broader ecosystem. This structure exists partly due to regulatory constraints under the Genius Act, which prohibits direct rewards to end users, requiring distribution through intermediaries instead.

The Fortify Acquisition and Institutional DeFi

Paxos announced its acquisition of Fortify, an institutional self-custody wallet company, signaling serious commitment to institutional DeFi participation. The acquisition enables institutions to access decentralized finance while maintaining proper custody controls—a critical requirement for regulated financial entities.

This move reflects Cascarilla's broader vision that on-chain operations will fundamentally transform financial markets and capitalism itself. Despite Paxos's extensive work with traditional financial institutions, the company maintains strong alignment with decentralization principles, positioning itself as infrastructure that serves both worlds.

Facts + Figures

• Paxos has existed since before Ethereum launched, making it one of the oldest companies in the blockchain financial infrastructure space

• USDG has grown to approximately $1.5 billion in circulation, with 2.5x growth in the most recent quarter

• Approximately $900 trillion in traditional assets currently exist off-chain and need to be tokenized

• Pax Gold currently holds approximately $1.4-1.5 billion in physical gold vaulted in London through ICBC and Brinks depositories

• Paxos previously settled real U.S. equity trades through an SEC no-action letter, working with Bank of America, Credit Suisse, Societe Generale, Instinet, and Wedbush

• The company has submitted an application to the SEC to become a registered clearing agency for stocks and bonds

• Current daily U.S. stock trading volume is approximately $250 billion, with a majority concentrated in about seven stocks

• Cascarilla predicts trading volume could reach $2.5 trillion daily within five to ten years through tokenization

• USDG is integrated with Visa, MasterCard, and Stripe for payment processing

• Every major exchange has listed USDG, including recent additions like Bybit

• Paxos acquired wallet company Fortify to enable institutional DeFi access

• Paxos has followed stablecoin regulatory frameworks for seven to eight years as an issuer

Top quotes

"Paxos has been around before Ethereum. So we're certainly, in some ways, OGs and very much believe in the concept and the spirit and ethos of decentralization."

"There is about $900 trillion of traditional assets, not on-chain assets, they're traditional assets, and they need to get on-chain."

"When you own the token, you own the gold. You can actually put in your token and you can see the serial number of the bar that you own."

"You should own the underlying stock. It shouldn't be a derivative instrument... Otherwise, you're just creating too many layers of fragility."

"If you don't think you're going to be a global rail, you should really piggyback off of the liquidity and the rails that other people have set up."

"The cool thing about stablecoins is they've democratized access to the dollar all over the world. But it's even, I think, far more impactful when you can democratize access to the risk free rate."

"It doesn't matter where you list because you're on a public chain and a public chain is the internet and it's open to everybody to be able to access."

"A lot of people think they're going to build global rails a lot more than will ultimately be global rails. So it's going to be a lot of disappointing people in the world."

"I bet you will look and we'll say, wow, it trades like $2.5 trillion in some period, like five or 10 years from here. And we'll all be surprised."

"We're an infrastructure provider and we're a neutral infrastructure. We're going to help our customers do whatever they want."

Questions Answered

What is Paxos planning to do with traditional equities?

Paxos has submitted an application to the SEC to become a registered clearing agency, which would allow them to custody stocks and bonds and issue them natively on-chain. This means investors would own the actual underlying securities rather than derivative instruments. The company previously ran a pilot program settling real U.S. equity trades with major institutions including Bank of America and Credit Suisse before the program paused under the previous SEC administration. If approved, this could fundamentally change how securities are held and traded globally.

How has USDG performed since launch?

USDG has grown to approximately $1.5 billion in circulation and experienced 2.5x growth in its most recent quarter. The stablecoin has achieved broad distribution, with listings on every major exchange and integration with payment providers including Visa, MasterCard, and Stripe. It's now accepted as collateral on platforms like OKX and Kraken, with Bybit recently joining the ecosystem. While Cascarilla acknowledges that maintaining 2.5x quarterly growth is unsustainable long-term, the trajectory indicates strong market adoption.

Should companies create their own white-label stablecoins?

Cascarilla advises most companies against trying to build their own global rails, as only two to five stablecoins will likely achieve that status. For companies focused on their own user base, he recommends either controlling the user interface while using existing stablecoins underneath, or creating a branded experience built on established infrastructure. The complexity of gaining acceptance across payment networks, exchanges, collateral frameworks, and DeFi protocols makes standalone stablecoin creation impractical for most issuers. Companies can launch quickly—within weeks—but should carefully consider their actual goals before committing resources.

How does tokenization benefit traditional asset holders?

Tokenization enables assets to move seamlessly and permissionlessly on public chains while maintaining ownership of the underlying asset rather than derivatives. This eliminates layers of counterparty risk and fragility that exist in traditional financial structures. For example, Pax Gold token holders own the actual physical gold bars in London vaults and can verify their specific bar's serial number. The same principle should apply to stocks and bonds—direct ownership with blockchain's transparency and accessibility benefits.

What impact could blockchain have on stock trading volumes?

Cascarilla predicts that current daily U.S. stock trading volume of approximately $250 billion could grow to $2.5 trillion within five to ten years through tokenization. He draws an analogy to the transition from manual floor trading to electronic markets, which dramatically increased both price compression and trading access. On-chain trading would create an open distribution mechanism accessible globally, potentially increasing trading volume by 10x or 100x as barriers to access are removed and new participants enter the market.

How does the Genius Act affect stablecoin innovation?

The Genius Act establishes a regulatory framework that Paxos has followed for seven to eight years, creating common standards for trust and oversight. However, it also imposes constraints—particularly prohibiting direct interest payments to end users, requiring distribution through intermediaries instead. Cascarilla believes interest-bearing stablecoins should eventually be permitted, noting that tokenized T-bills and repo markets will ultimately democratize access to the risk-free rate regardless. The regulation represents progress but may not be the final form of stablecoin policy.