Paxos Gets Regulatory Nod to Launch Stablecoins on Solana Blockchain, Expands International Operations
Summary:
Stablecoin issuer Paxos has received the green light from the New York Department of Financial Services to launch its products on the Solana blockchain, a move from its previous restriction to the Ethereum network. Head of Strategy for Paxos, Walter Hessert, said this development followed an extensive review of Solana's internal risk framework and suggested its faster transaction speeds and lower costs could appeal to Paxos' partners. Paxos is also seeking approval for other blockchains while expanding its operations internationally.
Paxos, a prominent issuer of stablecoins, has recently obtained official endorsement from the Department of Financial Services (DFS) in New York to introduce its products on the Solana blockchain. Until this point, the company's issuance of its Pax Dollar (USDP) stablecoin was permitted solely on the Ethereum network, a limitation set by DFS. It is anticipated that Paxos will appear on Solana on January 17, 2024. The Pax Dollar is a fiat-secured stablecoin, underpinned on a 1:1 basis by the U.S. dollar.
According to Fortune, the DFS granted Paxos a 'non-objection' to the plan to move USDP from Ethereum to Solana after a comprehensive and thorough evaluation, as disclosed by Walter Hessert, Paxos' head of strategy. The review scrutinised Solana's internal risk structure. Hessert argues that Paxos is the most tightly regulated stablecoin issuer globally. He distinguishes it from opponents behind Tether (USDT) and USD Coin (USDC) stablecoins, neither of which are DFS-regulated. Hessert emphasized, "We are the single firm that has issued regulated stablecoins on a large scale."
He pointed out that Solana's swifter transaction times and lower expenses, compared to Ethereum, could make Solana an attractive platform for Paxos's partners. He hinted PayPal may even extend its PayPal USD (PYUSD) stablecoin to Solana.
Solana, known for its high-speed transactions and inexpensive costs, is a layer-1 protocol able to handle between 50,000 and 65,000 transactions per second (TPS), greatly surpassing Ethereum's current 30 TPS. Despite multiple interruptions in 2022, the protocol has seen 100% uptime in recent months.
Paxos aims to obtain regulatory approval for other layer-1 and layer-2 blockchains, as stated by the head of strategy. Over the past months, Paxos has extended its operations internationally. The company announced in November that it had received initial approval from the Singaporean regulator to launch a new venture to initiate a U.S. dollar-secured stablecoin. Paxos also obtained approval from Abu Dhabi's regulatory body to issue stablecoins and provide digital asset services in the emirate.
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Published At
12/22/2023 6:10:38 PM
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