Stablecoin issuer Paxos has reportedly received regulatory approval from the New York Department of Financial Services (DFS) to launch its products on the Solana blockchain.
To date, the company has been authorized to issue its Pax Dollar (USDP) stablecoin only on the Ethereum network due to restrictions imposed by the DFS. The debut of Paxos on Solana is scheduled for Jan. 17, 2024.
Pax Dollar is a fiat-collateralized stablecoin, meaning it's backed 1:1 by the United States dollar.
As reported by Fortune, Paxos received a “non-objection” for the expansion of USDP from Ethereum to Solana after an “extensive and exhaustive review,” said Walter Hessert, head of strategy at Paxos. The review focused on Solana's internal risk framework.
Hessert claims Paxos is “the most regulated stablecoin issuer in the world,” in a reference to the company's competitors behind the stablecoins Tether (USDT) and USD Coin (USDC), neither of which are regulated by DFS. “We are the only company that has been issuing regulated stablecoins at scale—period,” he stressed.
Hessert mentioned that Solana's faster transaction speeds and lower costs compared to Ethereum could make it a more appealing choice for Paxos' partners, suggesting PayPal could also expand its stablecoin PayPal USD (PYUSD) to Solana.
Solana is a layer-1 protocol known for its high transaction speed and low cost. It can process around 50,000 to 65,000 transactions per second (TPS), far surpassing Ethereum's current capability of about 30 TPS. The protocol faced many outages in 2022 but has been 100% uptime over the past few months.
Paxos is seeking regulatory approval for other layer-1 and layer-2 blockchains, according to the head of strategy. Over the past few months, Paxos has been expanding its international operations. On Nov. 16, the company announced a preliminary approval from Singapore’s regulator for a new entity intended to launch a U.S. dollar-backed stablecoin. Paxos also secured approval from Abu Dhabi's regulator to issue stablecoins and conduct digital asset services in the emirate.
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