On December 22, Paxos, a company known primarily as a BUSD, PYUSD, and PAXG stablecoin issuer, announced the launch of its USDP stablecoin on the Solana blockchain on January 17, 2024. Paxos received the approval from the New York Department of Financial Services (NYDFS). So far, USDP has only been on Ethereum.
What is Paxos
Paxos is a New York-based fintech company specialising in blockchain solutions for enterprises. It is known for launching the USDP stablecoin in 2018, formerly partnering with Binance to issue BUSD, and collaborating with PayPal to issue PYUSD. The company also issues the PAXG stablecoin, backed by real gold. All of the stablecoins are powered on Ethereum.
Paxos works closely with the NYDFS. In a recent interview with Fortune, Walter Hessert, the firm’s head of strategy, separately emphasised that Paxos "is the most regulated stablecoin issuer in the world" and "the only company that has been issuing regulated stablecoins at scale".
USDP expansion on Solana
On December 22, Walter Hessert said that the NYDFS had approved Paxos to expand its products on the Solana blockchain, the first of which will be the company's own USDP stablecoin.
Moreover, Hessert stated that he believes their partner PayPal will also want to launch services on Solana.
USDP is a US dollar-pegged stablecoin launched in 2018 on Ethereum. According to the reports, the collateral consists of cash and US Treasury securities. The reserves are overseen by the NYDFS. In accordance with New York law, the USDP collateral assets are segregated from the company's assets, which helps maintain the peg even in the event of a possible Paxos bankruptcy.
USDP currently has a capitalisation of $371.5 million, making it the eighth largest asset among all the stablecoins on the market. Compared to the tops like USDT and USDC, which are capitalised at 91.2 billion and 25 billion, respectively, USDP is very small. However, the launch on Solana in January will probably increase interest in such a regulatory-friendly stablecoin.
Solana continues to the moon with payment giants
The information about the upcoming USDP launch on Solana comes amidst a strong increase in interest in blockchain and a rise in the price of SOL. Read about the reasons behind this dynamics in our article: SOL enters the top 5 by capitalization with a 300% growth since mid-autumn.
Over the weekend of December 23–24, the SOL price reached $118.1 and is currently trading at $124.5, with a capitalisation of 49.2 billion. SOL has surpassed BNB and now ranks fourth largest cryptocurrency.
This is not the first time that Solana has attracted interest among fintech companies; previously, Visa started testing USDC payments. Now Paxos is starting to launch solutions on Solana. Perhaps, PayPal will be interested in something similar soon as well.
👀 You might also like: