Paxos, the stablecoin issuer, has gained approval from the New York Department of Financial Services (DFS) to extend its operations to the Solana blockchain. Previously restricted to issuing its Pax Dollar (USDP) stablecoin solely on Ethereum, Paxos plans to debut on Solana on January 17, 2024.
Pax Dollar, backed 1:1 by the US dollar, received a “non-objection” for the transition from Ethereum to Solana after a comprehensive review of Solana’s internal risk framework, as noted by Walter Hessert, Paxos’ head of strategy. Emphasizing Paxos as the most regulated stablecoin issuer globally, he highlighted the company’s unique regulatory status compared to competitors like Tether.
Hessert pointed out that Solana’s faster transaction speeds and lower costs make it an attractive option for Paxos’ partners, hinting at the possibility of PayPal expanding its stablecoin on Solana.
Solana, recognized for its high transaction speed and cost efficiency, processes 50,000 to 65,000 transactions per second, outpacing Ethereum’s current capability of around 30 TPS. Despite past outages in 2022, Solana has achieved 100% uptime in recent months.
Looking ahead, Paxos is seeking regulatory approval for integration with other layer-1 and layer-2 blockchains. The company has been actively expanding its global presence, receiving preliminary approval from Singapore’s regulator for a new entity to launch a US dollar-backed stablecoin and securing approval from Abu Dhabi’s regulator for stablecoin issuance and digital asset services in the emirate.