Paxos receives preliminary approval to launch a USD stablecoin in Singapore
November 16, 2023 10:16 AM
The USD-backed token will be issued through a new local Paxos organization that has acquired preliminary clearance in Singapore and will be following the country's impending stablecoin rules.
Paxos, a company specializing in crypto infrastructure, has received preliminary approval from Singapore's regulator for a new business that intends to launch a stablecoin backed by the U.S. dollar.
Paxos announced the formation of Paxos Digital Singapore Pte. Ltd. on November 15 and said it had gained preliminary approval from Singapore's Monetary Authority (MAS). The new company will be permitted to provide services for digital payment tokens and will issue a stable cryptocurrency pegged to the US dollar under the MAS's planned stablecoin laws.
Once Paxos receives final approval, it plans to work with enterprise clients in Singapore to issue the stablecoin.
U.S. dollars are in high demand around the world, but it is still tough for consumers in countries other than the United States to get their hands on them in a way that is safe, reliable, and abides by all applicable regulations, according to Walter Hessert, head of strategy at Paxos. "Paxos will be able to expand the global user base for its regulated platform thanks to the MAS's in-principle approval."
On August 15, the Monetary Authority of Singapore (MAS) released its final rules for stablecoins. Stablecoins are tokens issued by non-banks that are tied to the value of the Singapore dollar or G10 currencies, such as the euro, British pound, and U.S. dollar, and have a circulation of more than SGD 5 million ($3.7 million).
On August 7th, PayPal released PYUSD, a stablecoin issued by Paxos that is pegged to the US dollar.
Paxos used to mint Binance's defunct BUSD stablecoin; however, the New York Department of Financial Services labeled the token an unregistered security, forcing Paxos to stop minting the token.
According to Paxos, in order to maintain compliance, the company releases monthly documents and reserve reports and fully backs all of its stablecoins with US dollars and cash equivalents.