In a bold strategic move, Paxos, a New York-based stablecoin issuer, has announced its plan to broaden its stablecoin issuance. Starting January 17, 2024, Paxos intends to make its stablecoin, USDP, available on the Solana blockchain platform, a decision previously confined to Ethereum.
This development signifies a pivotal advancement for Paxos in the fiercely competitive realm of stablecoins. The market sees giants like Circle and Tether vying for supremacy, but Paxos' latest move could potentially alter the landscape.
The expansion has received the green light from the New York Department of Financial Services (DFS). The DFS's approval followed an intensive review, the specifics of which remain undisclosed by Paxos.
Walter Hessert, the Head of Strategy at Paxos, expressed his views on this significant step. "The expansion of our stablecoin platform to support Solana marks an important step towards making stablecoins ubiquitous for everyday consumers," he stated. Hessert emphasized Paxos' commitment to setting high standards in oversight, reserve management, and issuance within the stablecoin market.
Paxos, renowned for its regulatory compliance, became the first crypto firm to secure a trust charter under the DFS's digital asset regulatory framework in 2015. In 2018, the company received approval from DFS to issue its first stablecoin, 'Paxos Standard', which was later rebranded to USDP in 2021.
Prior to its expansion into Solana, Paxos issued USDP exclusively on Ethereum, constrained by DFS regulations. Over time, the company has successfully forged partnerships with significant financial entities.
In recent developments, Paxos partnered with Mercado Libre in June to introduce the Pax Dollar (USDP) to users in Mexico. Additionally, in August, Paxos collaborated with PayPal to launch the PayPal USD (PYUSD) stablecoin.
However, Paxos hasn't been without regulatory challenges. In February, it was revealed that DFS was investigating Paxos, particularly concerning its involvement with BUSD, a stablecoin created with Binance. Subsequently, Paxos was instructed to cease issuing BUSD, a significant setback as it constituted a major revenue source.
Furthermore, EDX Markets, a nascent crypto exchange, terminated its partnership with Paxos, where Paxos was to act as the crypto custodian.
Despite ambitious expansion, Paxos' path is fraught with regulatory complexities, casting a shadow over its future endeavors.
The Global Dollar Network, backed by major fintech and crypto firms, has introduced USDG, a new stablecoin tied to the US dollar to promote stablecoin adoption globally. Issued by Paxos from Singapore, USDG aims to meet regulatory standards and encourage use in real-world transactions.
WeatherlyCascarilla warned that without a supportive regulatory environment, the United States is at risk of losing its competitive advantage in the global financial sector.
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