The crypto market continues to see an increase in regulatory efforts, with stablecoin issuer Paxos announcing regulatory approval from the New York Department of Financial Services (DFS) to launch services on the Solana ecosystem. Previously, Paxos was only authorized to issue its Pax Dollar (USDP) stablecoin on the Ethereum network due to DFS regulations.
With this regulatory approval, Paxos plans to launch its first product on the Solana ecosystem on January 17, 2024. The Pax Dollar, a US-backed stablecoin, will be offered to users. Paxos’ strategy director Walter Hessert stated that after a thorough review, the company decided not to object to expanding USDP from Ethereum to Solana, focusing on Solana’s internal risk framework.
Hessert highlighted Paxos as the most regulated stablecoin issuer in the world, in contrast to Tether and USD Coin, which are not regulated by DFS. He emphasized that Paxos is the only company among regulated stablecoin projects to issue on a large scale.
He also mentioned that Solana’s ecosystem, with higher transaction speeds and lower costs compared to Ethereum, could make it a more attractive option for Paxos’ partners. Hessert suggested that PayPal’s stablecoin project, PayPal USD, could also be integrated into Solana.
Solana is known for its high transaction speed and low costs, capable of processing approximately 50,000 to 65,000 transactions per second (TPS), a significant improvement over Ethereum’s current capacity of around 30 TPS. Despite facing several outages in 2022, the Solana ecosystem has been operating without interruptions for the past few months.
According to Paxos’ strategy chief, the company is seeking regulatory approval for other Layer-1 and Layer-2 ecosystems and has been expanding its international operations. Paxos received preliminary approval from Singapore’s regulatory authority on November 16 to launch a new establishment aimed at issuing a US dollar-backed stablecoin. It also obtained approval from Abu Dhabi’s regulatory authority to issue stablecoins and conduct crypto asset services.
