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Paxos, a leading stablecoin issuer, has recently obtained regulatory approval from the New York Department of Financial Services (DFS) to extend its operations to the Solana blockchain. This move marks a significant milestone for Paxos, which until now was only authorized to issue its Pax Dollar (USDP) stablecoin on the Ethereum network. The launch of Paxos on Solana is slated for January 17, 2024, introducing new prospects for the stablecoin market.
The approval follows an in-depth review by the DFS, focusing on Solana’s internal risk framework. Walter Hessert, the head of strategy at Paxos, highlighted the company’s commitment to regulatory compliance, stating that Paxos is “the most regulated stablecoin issuer in the world.” This development positions Paxos distinctively from its competitors, such as Tether and USD Coin, which the DFS does not regulate.
Solana’s Efficiency Boosts Paxos Stablecoin Experience
Paxos’s transition to Solana offers several benefits, owing to the blockchain’s high transaction speed and low cost. Solana is renowned for its capability to handle approximately 50,000 to 65,000 transactions per second (TPS), significantly outperforming Ethereum’s current rate of about 30 TPS. This efficiency is poised to enhance the user experience for Paxos’s partners and customers.
Hessert also suggested that Solana’s attributes could influence major partners, like PayPal, to expand their stablecoin offerings to the Solana network, such as PayPal USD. The lower costs and faster transaction speeds are attractive features for entities looking to optimize their blockchain operations.
Paxos’s Regulatory Compliance and Global Expansion
Paxos’s commitment to regulatory compliance is a cornerstone of its operational philosophy. The company’s regulated status gives its users trust and security, setting it apart in the stablecoin market. The stablecoin issuer’s regulatory journey includes securing approvals from various international regulators.
Recently, the company received preliminary approval from Singapore’s regulator for a new entity designed to launch a U.S. dollar-backed stablecoin. Moreover, Paxos has also been approved by Abu Dhabi’s regulator to issue stablecoins and provide digital asset services in the Emirates.
The expansion of the company into other layer-1 and layer-2 blockchains is also on the horizon, as indicated by Hessert. This strategy aligns with the company’s vision of becoming a globally recognized and trusted stablecoin issuer. The move into diverse blockchain environments broadens Paxos’s reach and showcases its adaptability in the rapidly evolving world of digital assets.
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