May 29, 2024
NY Approves Paxos for Solana; Blockchain Entry Secured
Latest Cryptocurrency News

NY Approves Paxos for Solana; Blockchain Entry Secured

The New York Department of Financial Services (NYDFS) has granted regulatory approval for Paxos to extend its operations to the Solana blockchain, marking a significant development for the stablecoin issuer. While Paxos has been limited to issuing its Pax Dollar (USDP) stablecoin solely on the Ethereum network, regulatory constraints from the DFS have now been eased.

The debut of Paxos on Solana is scheduled for January 17, 2024. The Pax Dollar is a fiat-collateralized stablecoin, maintaining a 1:1 backing with the United States dollar.

Walter Hessert, head of strategy at Paxos, revealed that the DFS granted a “non-objection” for expanding USDP from Ethereum to Solana following an “extensive and exhaustive review.” The assessment focused on Solana’s internal risk framework. Hessert emphasized Paxos’ standing as “the most regulated stablecoin issuer in the world,” distinguishing it from competitors like Tether and USD Coin (USDC), which lack DFS regulation.

Highlighting Solana’s advantages, Hessert noted its faster transaction speeds and lower costs compared to Ethereum. This could potentially make Solana an appealing choice for Paxos’ partners, with speculation that PayPal might consider expanding its stablecoin, PayPal USD (PYUSD), to Solana.

Solana, recognized for its high transaction speed and cost-effectiveness as a layer-1 protocol, processes approximately 50,000 to 65,000 transactions per second (TPS). This surpasses Ethereum’s current capacity of about 30 TPS. Despite facing outages in 2022, Solana has achieved 100% uptime in recent months.

Paxos is actively pursuing regulatory approval for other layer-1 and layer-2 blockchains, according to Hessert. The stablecoin issuer has been expanding its international operations in recent months, securing preliminary approval from Singapore’s regulator for a new entity to launch a U.S. dollar-backed stablecoin. Paxos has also received approval from Abu Dhabi’s regulator to issue stablecoins and offer digital asset services in the emirate.

Image by Gerd Altmann from Pixabay

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