Paxos Expands with the Launch of USDP on Solana

Stablecoin issuer Paxos has marked a significant milestone by obtaining approval from the New York Department of Financial Services (DFS) to launch its Pax Dollar (USDP) stablecoin on the Solana blockchain. This move expands Paxos’s operations beyond the Ethereum network, where it had exclusively issued its stablecoin. The DFS’s decision to greenlight this expansion followed an extensive review focusing on Solana’s risk framework.

What is USDP on Solana?

USDP is a type of cryptocurrency that is issued by Paxos Trust Company, and its value is directly linked to the US dollar. This means that for every USDP coin, there is a corresponding US dollar held in reserve to ensure its value and stability. Furthermore, the reserves are held in cash and cash equivalents, which guarantees immediate availability of funds for customers who wish to redeem their USDP.

Additionally, USDP is subject to strict regulations by the New York State Department of Financial Services (NYDFS), which aims to protect consumers from any potential risks associated with the use of stablecoins. Paxos Trust cannot use customer assets to satisfy its debts in case of insolvency. This is because segregated accounts hold client assets remotely, making them inaccessible to Paxos’s creditors.

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What Does it Mean for Paxos Clients?

Paxos has switched to Solana for faster, cost-effective, and accessible stablecoin offerings.

USDP Debut on Solana

USDP, a stablecoin backed by the US dollar, will launch on Solana on Jan 17, 2024.

Higher Transaction Speeds

Paxos clients stand to gain tangible advantages from this move, notably experiencing higher transaction speeds on the Solana blockchain.

Cost Reduction

Solana reduces transaction costs for Pax Dollar clients compared to Ethereum.

Accessible Stablecoins

Walter Hessert of Paxos aims to integrate USDP with Solana to increase the accessibility of stablecoins for everyday consumers.

Safety and Reliability

The integration with Solana emphasizes safety and reliability in stablecoin usage, aligning with Paxos’s commitment to providing secure and trustworthy financial services.

About Paxos

Paxos has been a key player in the stablecoin market, setting standards for oversight, reserve management, and issuance. The company’s expansion to Solana aligns with its strategy to make stablecoins a common and reliable choice for consumers.

Paxos seeks regulatory approval to operate on other blockchains to broaden its compatibility. The company has regulatory approvals to launch U.S. dollar-backed stablecoins and digital asset services in Singapore and Abu Dhabi.

Way Forward

Paxos has a bigger plan than just expanding onto Solana from Ethereum. The company is expanding to other blockchain platforms and building a stronger global presence.

The Singapore and Abu Dhabi authorities have recently given Paxos the green light. Paxos is a major player in stablecoin issuance and digital asset services as it integrates blockchain technology into its plans.