Paxos’s USDP is allowed to expand operations on Solana
According to information from Fortune magazine, Paxos, a stablecoin brokerage and issuer, has received approval from the New York Department of Financial Services (NYDFS) to expand its Pax Dollar (USDP) product to the Solana blockchain. Deployment is expected to begin on January 17, 2024.
With the expansion of operations to the Solana blockchain, Paxos has achieved an important step forward in the race for market share with the two current leading competitors in the field of stablecoin issuance, Circle (USDC) and Tether (USDT). This also means that USDP will be issued for the first time on a blockchain other than Ethereum and all these activities are carried out under the legal management of NYDFS.
Exclusive: NY financial regulator approves Paxos expansion to Solana, allowing for its first stablecoin issuance beyond Ethereum. https://t.co/RAHrITw0jz
— FORTUNE (@FortuneMagazine) December 22, 2023
Paxos became the first cryptocurrency company authorized by the New York Department of Financial Services (NYDFS) to provide digital asset management services back in 2015. Until 2018, NYDFS also approved Paxos issued the first stablecoin, called Paxos Standard (PAX), later renamed Pax Dollar (USDP).
Stablecoins are digital currencies built on blockchain and hold stable value, often linked to assets such as gold, silver or fiat money (USD, EUR, VND). In the case of USDP, it is linked to the US dollar (USD).
Different from competitors such as Tether (USDT) and Circle’s USD Coin, Paxos is only allowed to issue USDP on the Ethereum blockchain due to NYDFS restrictions, which makes the scale of their operations seem “weak point”.
However, Walter Hessert, Chief Strategy Officer of Paxos, affirmed the company’s commitment to working directly with NYDFS rather than crossing financial management boundaries to differentiate itself from competitors.
Mr. Hessert also emphasized the advantages of having their “own path” in this way, placing them in a position of trust from leading financial partners such as Mastercard and Mercado Libre. The relationship with PayPal combined to create the PYUSD stablecoin.
Paxos, with backing from Bank of America, Peter Thiel Founders Fund and Coinbase Ventures, raised more than $540 million and valued at $2.4 billion in a Series D round in 2021. The company also partnered with Binance to issue BUSD, but encountered regulatory difficulties and stopped.
Related: What are Stablecoins? Learn All about Stablecoins
USDP’s capitalization is allowed to operate on Solana
Currently, Paxos’s Pax Dollar (USDP) has a market capitalization of 371 million USD.
Paxos’s Pax Dollar (USDP) ranks 8th in Coinmarketcap’s stablecoin ranking by market capitalization. Photo taken on December 25, 2023
