The expansion of Paxos to the Solana blockchain has been approved by the New York Department of Financial Services (DFS).
According to reports, the New York Department of Financial Services (DFS) has given stablecoin issuer Paxos regulatory approval to introduce its products on the Solana blockchain.
Due to DFS restrictions, the company is only currently able to issue its Pax Dollar (USDP) stablecoin on the Ethereum network. On January 17, 2024, Paxos on Solana is expected to make its debut. As a fiat-collateralized stablecoin, Pax Dollar has a 1:1 backing from the US dollar.
Following a “long and thorough review,” Paxos’ head of strategy, Walter Hessert, stated that the company had received a “non-objection” for the USDP’s expansion from Ethereum to Solana, as reported by Fortune. Solana’s internal risk framework was the main subject of the review.
Hessert refers to the rival companies that create Tether and USD coin, two stablecoins that are not subject to DFS regulation, when he asserts that Paxos is “the most regulated stablecoin issuer in the world.” “We have been the only company, period, to issue regulated stablecoins at scale,” he emphasised.
Hessert highlighted that Solana might be a more desirable option for Paxos’ partners due to its quicker transaction speeds and cheaper fees than Ethereum, and he suggested PayPal could potentially extend its stablecoin PayPal USD to Solana.
Layer-1 protocol Solana is renowned for its inexpensive and quick transactions. Its transaction processing speed (TPS) is between 50,000 and 65,000, significantly faster than Ethereum’s current TPS of about 30. The protocol had numerous failures in 2022, but in the last few months, it has had 100% uptime.
According to the head of strategy, Paxos is applying for regulatory approval for additional layer-1 and layer-2 blockchains. Paxos has been growing its international business over the last few months. On November 16, the business revealed that Singapore’s regulator had given a new entity that planned to introduce a stablecoin backed by US dollars preliminary approval. The regulator in Abu Dhabi has granted Paxos permission to issue stablecoins and provide digital asset services within the emirate.