25 December 2023
Stablecoin issuer Paxos expands its offerings to the Solana blockchain, receiving regulatory approval from the New York Department of Financial Services (DFS).
Paxos, a leading stablecoin issuer, has received regulatory approval from the New York Department of Financial Services (DFS) to launch its Pax Dollar (USDP) stablecoin on the Solana blockchain. This marks a significant milestone for Paxos, as it has been limited to issuing stablecoins only on the Ethereum network due to regulatory restrictions. The move to Solana is expected to provide Paxos with faster transaction speeds and lower costs, making it an appealing choice for the company’s partners. With this approval, Paxos aims to expand its presence in the stablecoin market and solidify its position as the most regulated stablecoin issuer in the world.
Paxos’ Regulatory Approval and Expansion Plans
Paxos has received a “non-objection” from the DFS to expand its stablecoin, Pax Dollar (USDP), from Ethereum to Solana. This approval follows an extensive and exhaustive review of Solana’s internal risk framework. Walter Hessert, head of strategy at Paxos, emphasizes that the company is the most regulated stablecoin issuer globally, setting it apart from competitors like Tether (USDT) and USD Coin (USDC), which lack regulatory oversight. Paxos’ commitment to regulatory compliance has positioned it as a trusted player in the stablecoin market.
Hessert also highlights Solana’s advantages over Ethereum, including faster transaction speeds and lower costs. Solana’s layer-1 protocol can process up to 65,000 transactions per second (TPS), far surpassing Ethereum’s current capacity of around 30 TPS. These features make Solana an attractive choice for Paxos and its partners, potentially leading to further expansion of stablecoin offerings on the Solana blockchain, including PayPal’s stablecoin, PayPal USD (PYUSD).
Solana’s Strengths and Recent Performance
Solana is renowned for its high transaction speed and low cost, making it a popular choice for blockchain projects. With its ability to process up to 65,000 TPS, Solana outperforms Ethereum in terms of scalability. Although Solana experienced several outages in 2022, it has demonstrated 100% uptime in recent months, enhancing its reputation as a reliable blockchain platform.
Solana’s performance and scalability have attracted the attention of Paxos, leading to the decision to expand its stablecoin offerings to the Solana blockchain. The partnership between Paxos and Solana is expected to leverage the strengths of both platforms, providing users with a seamless and efficient stablecoin experience.
Paxos’ Future Expansion Plans
Paxos is not stopping at Solana. The company is actively seeking regulatory approval to launch its stablecoins on other layer-1 and layer-2 blockchains. This strategic move aims to expand Paxos’ reach in the global stablecoin market and offer its services to a wider range of users.
In recent months, Paxos has been making significant strides in its international operations. The company secured preliminary approval from Singapore’s regulator to launch a U.S. dollar-backed stablecoin, further strengthening its presence in the Asian market. Additionally, Paxos received approval from Abu Dhabi’s regulator to issue stablecoins and conduct digital asset services in the emirate. These regulatory approvals highlight Paxos’ commitment to compliance and its ambition to become a dominant player in the stablecoin ecosystem.
Paxos’ regulatory approval to launch its stablecoin on the Solana blockchain marks a significant milestone for the company. The move to Solana offers faster transaction speeds and lower costs, making it an attractive choice for Paxos and its partners. With its commitment to regulatory compliance, Paxos aims to solidify its position as the most regulated stablecoin issuer globally. The expansion to Solana is just the beginning, as Paxos seeks to launch its stablecoins on other blockchains and expand its international operations. As the stablecoin market continues to evolve, Paxos’ regulatory approach and strategic partnerships position it for continued success.