Paxos has received the regulatory clearance to launch its Paxos USDP stablecoin on the Solana blockchain on January 17, 2024. USDP is one of the older stablecoins but to date, Paxos has only issued stablecoins on the Ethereum blockchain.
Its regulator is the New York State Department of Financial Services (NYDFS). While the USDC issuer Circle is also regulated by the NYDFS, unlike Paxos, Circle is not a trust company. Hence Circle has far more legal leeway to issue on different blockchains. However, as S&P Global recently noted, Trust companies are bankrupt remote, but Circle’s structure is untested so far.
Paxos is also the issuer of the PayPal stablecoin (PYUSD) and was the issuer of the Binance stablecoin. Both of these were only available on Ethereum. Binance’s self issuance on other blockchains was thought to be a key factor in NYDFS shutting it down. In hindsight, Binance’s AML failures likely played an even bigger role.
“Regulatory oversight ensures that Paxos only builds solutions on blockchain protocols with the greatest security and integrity,” Paxos said today in a statement. “Paxos utilizes blockchain technology in responsible ways to develop real-world use cases to improve the financial system.”
Raj Gokal, Co-Founder of Solana, said, “Paxos’s decision to bring stablecoin issuance to the Solana blockchain will showcase how Solana’s high-performance network and low transaction fees can support regulated financial products and provide leaders like Paxos new ways to scale and innovate.”
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