Paxos extends operations to Solana with the launch of USDP on its blockchain
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Paxos, the company behind the stablecoin Pax Dollar (USDP), recently received approval from the New York Department of Financial Services (DFS) to expand its operation. The firm now intends to launch USDP on Solana’s blockchain, thus officially going beyond Ethereum’s network.
Until now, Pax Dollar has been restricted to Ethereum, but this new move will put a stop to this exclusivity.
Paxos is now a multi-chain #stablecoin issuer! Our regulated digital dollar USDP will soon be available on the @solana blockchain 🚀
"We're making it easier for anyone to get and use the safest, most reliable stablecoins," says Paxos' @whessert. Learn more:… pic.twitter.com/DoW3nrPWof
— Paxos (@Paxos) December 22, 2023
Paxos’ USDP to go live on Solana in less than a month
Paxos received permission to expand its stablecoin onto Solana’s blockchain after a lengthy, rigorous review process conducted by the DFS. The process was also heavily focused on Solana’s risk framework.
Paxos’ head of strategy, Walter Hessert, described the review process as extensive and exhaustive, and it resulted in DFS having no objections to the expansion.
The company’s Pax Dollar is a fiat-collateralized stablecoin pegged to the US dollar, and backed 1:1. It is expected to emerge on Solana’s platform on January 17, 2024. Not only will this mean that Paxos’ stablecoin will now become a multi-chain asset, but it is also notable due to the fact that Solana is significantly faster than Ethereum’s network, while the cost of making transactions is considerably cheaper.
Specifically, Solana can process anywhere between 50,000 and 65,000 transactions per second (TPS), whereas Ethereum can only process 30 TPS at its current capacity. Hessert commented on the move by saying that the expansion of Paxos’ stablecoin platform to support Solana marks an important step towards making stablecoins ubiquitous for everyday consumers.
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,” he explained.
Last year, in 2022, Solana has suffered numerous outages which caused many to lose confidence in the reliability of its blockchain. However, the situation has seen a significant improvement in 2023, and the project even reported a 100% uptime throughout the past several months.
Paxos is gaining regulatory approvals abroad while the SEC plans a lawsuit
While Pax Dollar’s expansion to Solana is the first instance of the stablecoin leaving Ethereum’s ecosystem, it likely won’t be the last. In fact, Paxos is actively pursuing regulatory approvals to operate on other L1 and L2 blockchains.
In addition, the company has been expanding its presence on an international scale. Last month, for example, the firm announced that it had received preliminary approval from the regulators of Singapore, which will allow it to launch its USD-backed stablecoin.
On top of that, Paxos also received similar approval to issue stablecoins and offer digital asset services by the regulators from Abu Dhabi. Unfortunately, the company seems to be having better luck with regulators abroad than in its home country of the United States. Earlier this year, the US SEC planned to sue Paxos for violations of investor protection laws.
The firm was told that the enforcement action was planned due to its ties to Binance USD, which the SEC views as an unregistered security.
