Paxos has received regulatory approval from the New York Department of Financial Services (DFS) to expand its stablecoin issuance to the Solana blockchain. This marks a significant move for Paxos, which prides itself on being the most regulated stablecoin issuer globally.
The expansion to Solana, a high-performance blockchain known for rapid transaction speed, near-instant settlement, and negligible transaction fees, is set to launch on January 17, 2024. Paxos plans to offer its USDP stablecoin to the public through Solana, broadening the growing payments ecosystem on the blockchain.
Paxos is a regulated blockchain infrastructure company that provides digital asset and blockchain solutions for global financial institutions. The company is known for its stablecoins, Paxos Standard (PAX) and Paxos Gold (PAXG), which are backed by the US dollar and gold, respectively.
Paxos’ mission is to harness blockchain technology to build infrastructure that enables enterprises to bring innovative products to market.
Solana is a third-generation blockchain-based platform that aims to provide a fast, secure, and scalable infrastructure for decentralized applications.
Solana’s native cryptocurrency is SOL, which is used to pay transaction fees and for staking. It is available to buy and sell via exchanges like Coinbase. Solana is designed to achieve high transaction speeds without sacrificing decentralization, employing a bundle of novel approaches, including the “proof of history” mechanism.
Pax Dollar (USDP) is a USD-backed stablecoin created by Paxos, a regulated financial technology company. It maintains a 1:1 parity with the US dollar, as Paxos Trust Company holds equivalent USD reserves for each USDP token.
The stablecoin is regulated and audited, offering transparency and an additional layer of protection. USDP reserves are 100% in cash, allowing for transparent 1:1 redemption. Assets held by Paxos Trust Company are secure, protecting in case of insolvency.
USDP facilitates cross-border transfers with low fees, making it suitable for remittances, trading, payments, and as a store of value. Available on exchanges like Coinbase, USDP offers a stable and efficient digital alternative to traditional fiat currencies.
Regarding the approval, Walter Hessert, Head of Strategy at Paxos, noted the company’s commitment to regulatory compliance, stating, “Paxos is the most regulated stablecoin issuer in the world. We are the only company that has been issuing regulated stablecoins at scale—period.”
Paxos received DFS approval to issue its first stablecoin, initially called Paxos Standard, and later rebranded as USDP, in 2018. Unlike some competitors, Paxos operates within the regulatory framework set by DFS, enhancing trust with partners and major financial players.
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