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Paxos Receives Regulatory Approval to Expand Stablecoin Pax Dollar to Solana Network

Moving Beyond Ethereum

Financial services firm Paxos has received regulatory approval from the New York Department of Financial Services (DFS) to expand its fiat-backed stablecoin Pax Dollar (USDP) to the Solana blockchain. Paxos had previously only offered USDP on the Ethereum network due to DFS restrictions, but the “non-objection” from DFS will now allow the firm to access the higher transaction speeds and lower costs of Solana.

Paxos will start issuing USDP on the Solana network from January 17, 2024 according to a press release. Walter Hessert, founder and CEO of Paxos, stated that the integration with Solana will help Paxos “provide the safest, most reliable stablecoins to a broader set of businesses and consumers.”

Focus on Regulation

Hessert emphasized that Paxos is “the most regulated stablecoin issuer globally” and received a green light from DFS only after a thorough review of Solana’s risk framework. Unlike other major stablecoins like Tether and USD Coin, Paxos is directly regulated by DFS.

The Solana network’s much higher transaction throughput of 50,000 to 65,000 transactions per second compared to Ethereum’s 30 transactions per second may benefit Paxos partners like PayPal, which may also consider issuing its USD Coin stablecoin on Solana according to Fortune.

Potential for Wider Adoption

Raj Gokal, co-founder of Solana, said Paxos’s decision “illustrates how stablecoins are becoming more ubiquitous for everyday consumers,” adding that the partnership brings “even more transparency and regulatory oversight” to the ecosystem.

Paxos plans to seek approvals for other layer 1 and layer 2 blockchains in the future to “make regulated stablecoins more ubiquitous.”

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