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- 1 Crypto infrastructure firm Paxos has achieved preliminary approval from Singapore’s regulatory body for its upcoming project.
- 2 Paxos Digital Singapore Pte. Ltd., aimed at launching a stablecoin backed by the U.S. dollar.
In an announcement on November 15, Paxos revealed the initial endorsement from the Monetary Authority of Singapore (MAS). This newly authorized entity is poised to deliver digital payment token services and introduce a USD stablecoin, aligning with MAS’ proposed stablecoin regulations.
Upon securing full approval, Paxos has strategic plans to collaborate with enterprise clients for the localized rollout of the stablecoin within Singapore. Walter Hessert, Head of Strategy at Paxos, underlined the increasing global demand for the U.S. dollar and the existing challenges faced by consumers outside the United States in acquiring dollars securely while adhering to regulatory standards.
Hessert expressed optimism that MAS’s in-principle approval would pave the way for Paxos to extend its regulated platform to a more extensive international user base.
MAS had previously unveiled its regulatory framework for stablecoins on August 15, focusing on non-bank issued tokens pegged to the Singapore dollar or major currencies such as the euro, British pound, and U.S. dollar, with a circulation exceeding 5 Million Singapore dollars ($3.7 Million).
Paxos Foray in Stablecoin With PYUSD
In a notable development on August 7, PayPal launched its USD-backed stablecoin, PYUSD, with issuance handled by Paxos. It’s worth mentioning that Paxos was formerly the issuer of Binance’s now-defunct BUSD stablecoin.
However, following an order from the New York Department of Financial Services, Paxos had to halt the issuance of BUSD after the agency deemed it as an unregistered security.
Emphasizing its commitment to regulatory compliance, Paxos clarified that all of its stablecoins are fully backed by the U.S. dollar and cash equivalents. The company provides monthly attestations and reserve reports as part of its proactive measures to ensure adherence to regulatory standards.
The move aligns with the evolving landscape of the cryptocurrency industry, where regulatory frameworks are crucial for instilling confidence and ensuring the stability of digital assets in the market.
Stablecoin is a small-sized sector in the broader cryptocurrency space but equally influential and popular. These crypto-assets do not change their value more than fixed prices that are mostly backed by the US dollar. Tether (USDT) and USD Coin (USDC) are among the leading stablecoins where both hold more than $110 Billion in market cap.
Though stablecoins mostly remain pegged to their value, it becomes chaotic when they lose it. It was seen in the past with Terra network’s UST algorithmic stablecoin when it lost its peg with the US dollar and resulted in the collapse of the whole network.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
