Paxos Receives Regulatory Approval to Expand into Solana Blockchain
Paxos has announced an expansion of its stablecoin issuance to the Solana blockchain after securing regulatory approval from the New York Department of Financial Services.
In a press release published Friday, the stablecoin issuer noted that the initiative is a “significant milestone for the innovation and evolution of Paxos’s enterprise and consumer-facing businesses,” after previously exclusively using Ethereum due to restrictions imposed by the New York Department of Financial Services (DFS).
Additionally, the company said that it plans to offer its Pax Dollar (USDP) stablecoin on Solana to the public on January 17, 2024. USDP is a fiat-collateralized stablecoin.
“The expansion of our stablecoin platform to support Solana marks an important step towards making stablecoins ubiquitous for everyday consumers,” said Walter Hessert, head of strategy at Paxos. “By integrating USDP with Solana, we’re making it easier for anyone to get and use the safest, most reliable stablecoins.”
Hessert told Fortune that Paxos obtained a “non-objection” for extending USDP from Ethereum to Solana following a thorough and comprehensive evaluation, primarily centered around Solana’s internal risk framework.
In what could be perceived as a jab at Tether and USD Coin, Hessert asserted that Paxos holds the title of “the most regulated stablecoin issuer globally,” since neither Tether nor USD Coin are regulated by the DFS.
“We are the only company that has been issuing regulated stablecoins at scale—period,” Hessert claimed.
Hessert added that the superior transaction speeds and lower costs offered by Solana, especially when compared to Ethereum, might make it a more attractive option for Paxos’ partners. He also hinted at the possibility of PayPal, a Paxos partner, considering an expansion of its stablecoin, PayPal USD, to the Solana blockchain.
“Paxos’s decision to bring stablecoin issuance to the Solana blockchain will showcase how Solana’s high-performance network and low transaction fees can support regulated financial products and provide leaders like Paxos new ways to scale and innovate,” said Raj Gokal, co-founder of Solana. “The Solana network will enable Paxos to further its vision for a more open and financially empowering future.”
Solana can currently handle approximately 50,000 to 65,000 transactions per second. This significantly exceeds that of Ethereum, which presently operates at around 30 TPS.
Hessert also revealed that the company is actively pursuing regulatory approval for additional layer-1 and layer-2 blockchains.
