NYDFS Clears Paxos To Launch USDP Stablecoin On Solana

The US cryptocurrency market has been under close regulatory watch since the beginning of the year due to high-profile failures of the past year. Paxos, Binance, and Coinbase are among the top cryptocurrency exchanges embroiled in a contentious legal dispute with regulators.

Paxos Eyes Market Comeback With USDP Stablecoin

Following a previous setback, Paxos has resubmitted a proposal with a new strategy that fully complies with the regulator’s directives. Accordingly, the stablecoin behemoth expects its renewed proposal to receive the approval of the New York regulatory body.

Paxos recently announced the successful release of its latest stablecoin, the Pax Dollar (USDP), which it built outside the Ethereum protocol – it was built on the Solana blockchain. More importantly, the company has received approval from the New York Department of Financial Services (NYDFS)

Paxos celebrated this approval with an official statement, viewing it as a turning point in its business journey and a sign of its progress toward innovation and expansion. In addition, the firm also announced its plan to launch the USDP by January 17, 2024.

The stablecoin issuer revealed that its decision to build the USDP on Solana wasn’t random. This move was due to Solana’s lowered prices and impressive transaction speed, aligning with its objectives in developing the stablecoin.

Expanding Into The Solana Ecosystem

According to Paxos’s Head of Strategy, Walter Hessert, expanding the stablecoin platform to include Solana’s features is a significant step towards bringing stablecoins to a broader audience. Following this move, Paxos has set a standard for regulation, reserve management, and issues in the stablecoin market.

Hessert added that Paxos makes acquiring and using the most trustworthy stablecoins easier by building USDP on Solana. The Head of Strategy boasted that no stablecoin issuer is regulated worldwide like Paxos.

He added that the firm is unique among stablecoin issuers worldwide because the New York Department of Financial Services regulates its services. Hessert added that Tether and Circle (the leading stablecoin issuers) have yet to secure regulatory approval from the NYDFS.

Solana can process up to 60,000 transactions per second, making it one of the quickest blockchain networks. Stablecoins are more accessible and convenient for consumers due to the high throughput rate, allowing quicker and more efficient transactions.

New York’s Stringent Crypto Rules

Due to its lengthy registration process, the NYDFS prides itself as the leading crypto state regulator in the United States. The BitLicense, a stringent set of regulations prohibiting enterprises from engaging in “virtual currency business activity” in or with New York people without the appropriate authorization, was among the first crypto regulatory frameworks issued by the regulator.

This regulation became popular because few crypto firms could meet the stringent requirements, even if that was the intention. Furthermore, the DFS issued the Prior Guidance policy on June 24, 2020, drawing on its knowledge gained from supervising BitLicenses and New York-chartered limited-purpose trust corporations involved in virtual currency operations.

A New Release

However, the regulator released another thorough Guidance last month. This new directive, which impacts 33 identified VC Entities, replaces the Prior Guidance immediately. The release of these new guidelines affected many prominent participants in the crypto industry. Among them are Circle, Fidelity, Gemini, Robinhood, and PayPal.