Paxos Receives Regulatory Approval to Expand Stablecoin Offering on Solana Blockchain
In a major development for the stablecoin industry, Paxos, one of the largest stablecoin issuers, has obtained regulatory approval to extend its product offering to the Solana (SOL) blockchain. This expansion is set to launch on January 17, 2024. Earlier this year, Paxos was ordered by the financial regulator to halt the minting of Binance’s BUSD tokens due to various issues.
New York’s DFS Grants Paxos First Trust Charter
Paxos has positioned itself as the most regulated stablecoin issuer globally and has a track record of issuing regulated stablecoins at scale. The company received the first trust charter granted to a crypto firm under New York Department of Financial Services’ (NYDFS) digital asset regulatory framework in 2015. The NYDFS is the only US financial regulator that has established a comprehensive regulatory framework for cryptocurrencies, attracting major industry players like Coinbase and Gemini.
Paxos initially obtained NYDFS approval in 2018 to issue its inaugural stablecoin, Paxos Standard (now known as USDP), exclusively on the Ethereum (ETH) blockchain due to NYDFS restrictions.
Paxos Chooses Solana For Stablecoin Expansion
Solana, launched in 2020, has gained popularity for its potential to enhance transaction speeds and reduce costs compared to Ethereum. Despite facing challenges related to its association with Sam Bankman-Fried, Solana’s native token SOL has recently gained significant traction. Paxos believes that Solana’s speed and cost advantages over Ethereum make it an attractive option for implementing stablecoins in various use cases.
USDP Enters Solana Blockchain
Paxos plans to launch its initial offering on Solana with USDP, which currently has a market cap of around $370 million. While Paxos intends to seek approval for stablecoin issuance on other layer-1 and layer-2 blockchains, specific examples were not disclosed.
Hot Take: Solana Expansion Marks Milestone for Paxos
Paxos’ regulatory approval to expand its stablecoin offering on the Solana blockchain is a significant milestone in the company’s journey towards regulatory compliance, innovation, and facilitating new use cases within the digital asset ecosystem. With this expansion, Paxos aims to pave the way for broader adoption of stablecoins and capitalize on Solana’s speed and cost advantages over Ethereum. As of now, SOL’s price stands at $94.60, showing a notable uptrend and demonstrating bullish momentum across all time frames.
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