Paxos Receives Approval From NY Regulator To Join Solana Blockchain

Paxos, the leading stablecoin issuer, has received regulatory approval from the New York Department of Financial Services (DFS) to launch its products on the Solana blockchain. Paxos said the approval by the financial regulator marks a significant milestone for the evolution and innovation of the firm’s enterprise and consumer-focused operations, according to the details shared with Fortune.

Previously, Paxos was only allowed to issue its dollar-pegged token, USDP, on the Ethereum blockchain due to restrictions imposed by the DFS. The company plans to offer USDP on Solana to the public on Jan. 17, 2024.

Walter Hessert, head of strategy at Paxos, said the company received a “non-objection” for the expansion of USDP from Ethereum to Solana after an “extensive and exhaustive review.” The review focused on Solana’s framework for managing internal risks.

Hessert stated:

“Paxos has set the standard for oversight, reserve management and issuance in the stablecoin market. By integrating USDP with Solana, we’re making it easier for anyone to get and use the safest, most reliable stablecoins.”’

Further, he claimed Paxos is “the most regulated stablecoin issuer in the world.” This statement refers to the company’s competitors, such as Tether and USD Coin, which DFS does not regulate.

Solana Outperforms Ethereum

Hessert highlighted Solana’s faster transaction speeds and lower costs than Ethereum. He suggested that these advantages could make Solana a more attractive option for Paxos’ partners, hinting at the possibility of PayPal expanding its stablecoin PayPal USD to the Solana network.

Solana is a layer-1 protocol known for its low cost and high transaction speed. It can handle about 50,000 to 65,000 transactions per second (TPS). On the other hand, Ethereum can manage approximately 30 TPS.

According to the head of strategy, Paxos is also seeking regulatory approval for other layer-1 and layer-2 networks. The company has been expanding its international operations over the past few months.

On Nov. 15, it secured preliminary approval from the Monetary Authority of Singapore (MAS) for its new entity intended to launch a US dollar-backed stablecoin. Moreover, Paxos received approval from Abu Dhabi’s regulator to issue stablecoins and offer “crypto-brokerage and custody services” in the emirate.