Paxos Acquires Fordefi to Build On-chain Institutional Crypto Stablecoin Economy and Tokenization
KEY FACTS: Paxos has acquired New York-based institutional crypto wallet provider Fordefi for over $100 million, integrating Fordefi’s advanced multi-party computation (MPC) technology and direct DeFi connectivity into Paxos’ regulated stablecoin issuance and real-world asset tokenization platform. The deal combines Paxos’ extensive regulatory licenses (NYDFS, SEC, EU, and Singapore approvals) and existing stablecoin products (including PayPal’s PYUSD, USDP, PAXG, and USDG) with Fordefi’s enterprise-grade governance workflows and secure on-chain transaction capabilities, creating a unified, compliant infrastructure that allows institutions to issue stablecoins, tokenize assets, custody funds, and interact with DeFi protocols from a single platform.
Source: Paxos
Paxos Acquires Fordefi to Build On-chain Institutional Crypto Stablecoin Economy and Tokenization
Blockchain infrastructure powerhouse Paxos has announced the acquisition of Fordefi, a pioneering New York-based startup specializing in institutional-grade cryptocurrency wallets and custody solutions. The deal, valued at over $100 million, positions Paxos to dominate the stablecoin issuance sector and asset tokenization, offering enterprises a seamless gateway to the on-chain economy.
The acquisition, detailed in an official statement from Paxos on Tuesday, merges the company's robust, regulatory-compliant custody framework with Fordefi's cutting-edge multi-party computation (MPC) wallet technology and deep integrations into decentralized finance (DeFi) protocols. This synergy promises to deliver a unified platform where institutions can not only issue stablecoins and tokenize real-world assets but also execute complex on-chain transactions with enhanced security and governance controls. As the crypto industry grapples with evolving regulatory landscapes and skyrocketing demand for compliant digital asset tools, this partnership arrives at a pivotal moment, potentially redefining how corporations engage with blockchain technology.
The integration of Fordefi's innovative MPC solutions is to help Paxos create the foundational custody layer that will power the next wave of on-chain innovation, empowering institutions to issue stablecoins, tokenize assets, and manage transactions all in one secure environment.
Founded in 2021 amid the explosive growth of DeFi, Fordefi quickly emerged as a trailblazer in secure, enterprise-ready crypto wallets. Unlike traditional single-key wallets that pose significant risks in the event of a breach, Fordefi's MPC technology distributes private key management across multiple parties, eliminating single points of failure and bolstering resistance to hacks. This approach is particularly vital for DeFi applications, where users interact with smart contracts for lending, borrowing, and yield farming.
What set Fordefi apart from the outset was its focus on institutional governance. The platform incorporates advanced authorization workflows, allowing corporate treasurers and compliance teams to approve and sign off on on-chain activities in real time. This feature addresses a longstanding pain point for banks and fintech firms venturing into crypto: maintaining audit trails and internal controls without sacrificing the speed and efficiency of blockchain.
Under the terms of the acquisition, Fordefi will retain its operational independence in the short term, enabling it to continue serving its existing client base of hedge funds, venture capital firms, and Web3 startups. However, Paxos envisions a gradual integration roadmap that could span the next 12 to 18 months, embedding Fordefi's tech stack directly into Paxos' core offerings.
The undisclosed financial details were confirmed to exceed $100 million, a figure that reflects both Fordefi's rapid trajectory and the premium placed on custody innovation in a post-FTX world, where security lapses have cost the industry billions.
Paxos, established in 2012 and headquartered in New York, operates under stringent oversight from bodies like the New York State Department of Financial Services (NYDFS), the Securities and Exchange Commission (SEC), and equivalents in Europe and Singapore. This multi-jurisdictional licensing, spanning the United States, the European Union, and Asia—has made Paxos a go-to partner for blue-chip clients wary of regulatory pitfalls.
At the heart of Paxos' portfolio are its stablecoin and tokenization services, which have powered landmark products for household names. PayPal's USD (PYUSD), launched in 2023, relies on Paxos for issuance and redemption, marking one of the first mainstream fiat-backed tokens from a legacy payments giant. Similarly, Mastercard leverages Paxos for cross-border settlement solutions, while Interactive Brokers integrates its tech for tokenized securities trading. Paxos' stablecoin family extends beyond PYUSD to include the Pax Dollar (USDP), a fully reserved USD-pegged token; Pax Gold (PAXG), backed by physical bullion; and the Global Dollar (USDG), tailored for international markets.
These offerings have not only stabilized volatile crypto markets but also unlocked trillions in potential value through asset tokenization. With Fordefi's addition, Paxos aims to streamline this workflow, allowing clients to custody, issue, and trade tokenized assets on a single, compliant platform. Analysts predict this could accelerate institutional adoption, especially as global regulators like the UAE's Financial Services Regulatory Authority (FSRA) expand oversight to encompass DeFi and Web3 activities, as outlined in a recent legislative update.
Paxos' acquisition mirrors a seismic shift across the crypto exchanges and platforms racing to embed DeFi functionalities into their user experiences. As barriers to entry lower and yields beckon, traditional players are no longer content with mere crypto spot trading. They are diving headfirst into on-chain lending, tokenized equities, and automated yield generation.
In a related development, Kraken, the San Francisco-based exchange, in June 2025 supercharged its DeFi playbook through a partnership with DeFi Development Corp, a Solana ecosystem innovator. The collaboration launched xStocks, a platform that tokenizes Kraken's own shares on-chain, allowing global investors to trade them frictionlessly via smart contracts. This was built on a May 2025 initiative that enabled Kraken to offer tokenized U.S. equities to non-U.S. clients, bypassing traditional brokerage hurdles and tapping into a $10 trillion market for fractional ownership.
Coinbase, the Nasdaq-listed behemoth, followed suit in September with a bold integration of the Morpho lending protocol directly into its mobile app. Users can now lend their USDC holdings, including Coinbase's preferred stablecoin, without bridging to external DeFi platforms or fumbling with third-party wallets. The feature promises yields up to 10.8% APY, drawing in retail investors seeking passive income amid stubbornly high interest rates. Early adoption metrics suggest a 25% uptick in stablecoin deposits, underscoring the appeal of "DeFi lite" for mainstream audiences.
Not to be outdone, Crypto.com entered the fray in October by porting Morpho to its native Cronos blockchain. This upgrade lets users earn yields on wrapped Bitcoin (wBTC) and Ethereum (wETH), blending the security of proof-of-stake with DeFi's composability. For Crypto.com's 100 million-plus users, it's a gateway to earning without the complexities of gas fees or impermanent loss.
Yet, this enthusiasm comes against a backdrop of volatility. DeFi's TVL, a key barometer of ecosystem health, currently stands at approximately $116 billion, per data from DeFi analytics platform DeFiLlama. That's a sharp contraction from the $170 billion peak on October 9, 2025, just one day before the crypto market's most devastating liquidation cascade, which wiped out over $1.2 billion in leveraged positions and triggered a brief bearish scare. Analysts, however, remain bullish, attributing the dip to macroeconomic headwinds rather than structural flaws, and forecasting a rebound to $200 billion by mid-2026 as tokenization gains traction.
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