Blockchain infrastructure firm Paxos has obtained a preliminary license from the Monetary Authority of Singapore (MAS) for its new entity.
With the in-principal approval, Paxos Digital Singapore, the new entity, will offer digital payment token services to Singaporeans.
Further, Paxos announced plans to launch a USD-backed stablecoin. In a Thursday statement, Paxos noted that the new USD stablecoin will be compliant with MAS’ proposed stablecoin regulatory framework.
Proposed in August this year, the new regulatory framework seeks to ensure high price stability for stablecoins regulated in Singapore. The regulator noted that only entities that satisfy all requirements under the framework can apply for a “MAS-regulated stablecoins” approval.
“Paxos consistently pursues growth in global markets within regulated frameworks and engages with regulators to help inform digital asset rules.”
The company confirmed that it would only issue tokens that are subject to oversight by prudential regulators. Further, Paxos also maintains strict anti-money laundering (AML) and know-your-customer (KYC) standards in jurisdictions like Singapore.
Paxos also said that it will partner with enterprise clients to issue the new stablecoin in Singapore, upon full approval.
Paxos New Stablecoin Proposal in Singapore
Walter Hessert, Paxos Head of Strategy, said that customers outside the US face difficulties in getting USD safely, and reliably.
“This in-principle approval from the MAS will allow Paxos to bring its regulated platform to more users around the world.”
The company has a 1:1 backing by the US Dollar for all issued tokens, ensuring stability. Paxos executive hopes that the new venture will attract more clients outside the US, as demand for stablecoins is high.
The announcement comes a year after Paxos received an operating license from MAS, allowing it to offer tokenization and custody.
Paxos already issues the USDP stablecoin that has a circulating supply of 461.56 million. USDP reserves are held 100% in cash and US treasuries, implying that customer funds are available always for 1:1 redemption.
Additionally, PayPal’s stablecoin – PYUSD – which launched in August, is also from the same company. Previously, Paxos minted now-defunct Binance’s BUSD stablecoin. Binance ceased the stablecoin operations following its regulatory clash with the New York Department of Financial Services (NYDFS).
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