Singapore’s MAS Gives Nod to Paxos for USD Stablecoin Launch
Crypto firm Paxos has attained preliminary authorization from Singapore’s regulatory body, the Monetary Authority of Singapore (MAS), for its forthcoming venture.
The company announced on November 15 the green light for its new entity, Paxos Digital Singapore Pte. Ltd., marking a significant step toward the introduction of a U.S. dollar-backed stablecoin within the regulatory framework outlined by MAS.
This in-principle approval from MAS empowers Paxos Digital Singapore Pte. Ltd. to furnish digital payment token services, unveiling plans for the issuance of a USD-backed stablecoin that adheres to MAS’ proposed stablecoin regulations.
Once securing full authorization, Paxos intends to collaborate with corporate clients to introduce the stablecoin in Singapore, addressing the burgeoning global demand for secure and regulated access to the U.S. dollar.
Walter Hessert, Paxos’ head of strategy, emphasized the critical need met by this milestone, stating, “Global demand for the U.S. dollar has never been stronger, yet it remains difficult for consumers outside the U.S. to get dollars safely, reliably and under regulatory protections.”
He highlighted the significance of MAS’ in-principle approval in extending Paxos’ regulated platform to a broader spectrum of users worldwide.
MAS’ finalized framework, unveiled on August 15, delineates guidelines for regulating stablecoins, particularly focusing on non-bank issued tokens pegged to the value of the Singapore dollar or select G10 currencies like the euro, British pound, and U.S. dollar, with circulation surpassing 5 million Singapore dollars ($3.7 million).
The move by MAS underscores a pivotal stride in formalizing and structuring the evolving landscape of digital currencies within the realm of robust regulatory oversight.
Earlier in August, PayPal initiated the launch of its USD-backed stablecoin, PYUSD, a venture in collaboration with Paxos. Notably, Paxos had previously minted Binance’s now-defunct BUSD stablecoin but was directed by the New York Department of Financial Services to halt the token’s issuance, citing it as an unregistered security.
In response, Paxos reiterated its commitment to full collateralization of its stablecoins, emphasizing their complete backing by the U.S. dollar and equivalent cash reserves. The company further stressed its adherence to stringent compliance measures, regularly issuing attestations and reserve reports on a monthly basis to ensure regulatory compliance and transparency.
The approval from MAS signifies a significant stride for Paxos in establishing a regulated and secure pathway for global users to access U.S. dollar-backed digital assets. This landmark development not only underscores the evolution of stablecoins but also heralds a new era of regulatory compliance and innovation in the digital finance landscape.
