Blockchain infrastructure firm Paxos has received preliminary approval from the Monetary Authority of Singapore (MAS) for its new entity, Paxos Digital Singapore. With this in-principal approval, Paxos Digital Singapore is set to provide digital payment token services to Singaporeans.
Additionally, Paxos has announced intentions to launch a USD-backed stablecoin. The company emphasized that the new stablecoin will comply with MAS’s proposed stablecoin regulatory framework. Introduced in August of the current year, this regulatory framework aims to ensure high price stability for stablecoins operating under Singapore’s regulations. MAS specified that only entities meeting all the requirements outlined in the framework are eligible to apply for approval as “MAS-regulated stablecoins.”
Paxos has affirmed its commitment to pursuing growth in global markets within regulated frameworks, actively engaging with regulators to contribute to the development of digital asset rules. The company clarified that it will exclusively issue tokens subject to oversight by prudential regulators. In addition, Paxos adheres to rigorous anti-money laundering (AML) and know-your-customer (KYC) standards, particularly in jurisdictions such as Singapore.
Furthermore, Paxos announced plans to collaborate with enterprise clients to issue the new USD-backed stablecoin in Singapore, contingent upon obtaining full regulatory approval. This approach underscores Paxos’ emphasis on regulatory compliance and collaboration with established partners in the deployment of its stablecoin offerings.
Paxos New Stablecoin Proposal in Singapore
Walter Hessert, Head of Strategy at Paxos, highlighted the challenges faced by customers outside the U.S. in obtaining USD safely and reliably. With the in-principle approval from the Monetary Authority of Singapore (MAS), Hessert expressed that Paxos can now bring its regulated platform to a broader user base worldwide.
Paxos maintains a 1:1 backing by the U.S. Dollar for all issued tokens, ensuring stability. The company aims to meet the demand for stablecoins and hopes that the new venture, facilitated by MAS approval, will attract more clients globally, particularly those outside the U.S. This move aligns with Paxos’ strategy to offer a secure and regulated platform for users seeking access to USD in the form of stablecoins.
The recent announcement from Paxos regarding the preliminary license from the Monetary Authority of Singapore (MAS) follows Paxos receiving an operating license from MAS a year earlier. The initial license allowed Paxos to provide services in tokenization and custody.
Paxos is already the issuer of the USDP stablecoin, which has a circulating supply of 461.56 million. Notably, the reserves backing USDP are held entirely in cash and U.S. treasuries, ensuring that customer funds are available for 1:1 redemption at all times.
It’s worth mentioning that Paxos, the company behind the USDP stablecoin, also played a role in the launch of PayPal’s stablecoin, PYUSD, introduced in August. Additionally, Paxos was responsible for minting the now-defunct Binance BUSD stablecoin, with Binance discontinuing its stablecoin operations following regulatory issues with the New York Department of Financial Services (NYDFS).