- Until now, Paxos issued stablecoins exclusively in Ethereum; now it expands to Solana, highlighting its growth and adaptability.
- Paxos’ trust structure, unlike Circle, offers greater security and is regulated by the NYDFS.
Paxos, known for its innovation in the industry, has received regulatory clearance to launch its Paxos USDP stablecoin on the Solana blockchain on January 17, 2024. did you know that USDP is one of the oldest stablecoins? Until now, Paxos had only issued stablecoins on the Ethereum blockchain.
why is this relevant? Well, the regulatory authority behind Paxos is the New York State Department of Financial Services (NYDFS). While USDC’s issuer, Circle, is also regulated by NYDFS, there is a key difference: Circle is not a trust company.
This gives Circle more legal freedom to issue on different blockchains. However, as S&P Global recently pointed out, trust companies like Paxos have a more bankruptcy-protected structure, while Circle’s structure is still untested in this regard.
do you know what else Paxos has done?
It has been the issuer of the PayPal stablecoin (PYUSD) and the Binance stablecoin. Both were available only on Ethereum. Binance’s self-issuance on other blockchains was a key factor in NYDFS ending its operations. In retrospect, Binance’s anti-money laundering (AML) failures probably played an even bigger role.
Paxos stressed in a statement that regulatory oversight ensures that they only develop solutions on blockchain protocols with the highest security and integrity. “Paxos uses blockchain technology in responsible ways to develop real-world use cases that improve the financial system,” they stated. That’s a powerful statement, don’t you think?
Raj Gokal, co-founder of Solana, expressed his enthusiasm :
“Paxos’ decision to bring stablecoin issuance to Solana’s blockchain will show how Solana’s high-performance network and low transaction fees can support regulated financial products and offer leaders like Paxos new ways to scale and innovate.”
what does this mean for the future of stablecoins and blockchains?
Well, Paxos’ move to Solana could be a big step. Solana’s blockchain is known for its high speed and low transaction fees, which could open up new possibilities for regulated financial products. This not only shows the adaptability of Paxos in the cryptocurrency space, but also highlights the potential of Solana as a platform for financial innovations.
This news is a testament to the growth and maturation of the cryptocurrency ecosystem. The expansion of Paxos into a new blockchain with a focus on security and regulation, along with the backing of a platform like Solana, could usher in a new era for stablecoins and, in general, for blockchain technology.
We will be watching to see how this development influences the market and how other companies might follow suit to innovate and expand. Undoubtedly, 2024 will be an interesting year for the world of cryptocurrencies and blockchain technology. What will the future hold? It is clear that innovation and adaptation will be key in this exciting and dynamic industry.
