Paxos, a crypto infrastructure firm, has received conditional approval from Singapore regulators to establish a new entity aimed at launching a stablecoin backed by the US dollar. The announcement, made by Paxos on November 15, highlighted the preliminary approval granted by the Monetary Authority of Singapore (MAS) to its newly formed entity, Paxos Digital Singapore Pte. This new subsidiary intends to provide digital payment token services and is planning the issuance of a US dollar stablecoin, subject to clearance under MAS's proposed stablecoin regulations.
Upon obtaining full approval, Paxos aims to collaborate with corporate clients to introduce stablecoins within Singapore's regulatory framework. Walter Hessert, Paxos' head of strategy, emphasized the growing global demand for US dollars while acknowledging the challenges faced by consumers outside the United States in obtaining regulated US dollars securely. Hessert underscored the significance of MAS's conditional approval, noting that it enables Paxos to extend its regulated platform to a broader global user base.
MAS unveiled its finalized framework for regulating stablecoins on August 15, focusing on non-bank-issued tokens pegged to the value of the Singapore dollar or select G10 currencies like the euro, pound, and US dollar. The regulatory framework targets stablecoins with issuance volumes exceeding 5 million Singapore dollars (equivalent to approximately 370 thousand US dollars). Additionally, on August 7, PayPal introduced PYUSD, a US dollar-backed stablecoin issued in partnership with Paxos.
Paxos has a history in stablecoin issuance, previously minting Binance's BUSD stablecoin. However, New York's Department of Financial Services intervened and directed Paxos to halt the token's issuance, declaring it an unregistered security. Paxos clarified that all its stablecoins are fully backed by US dollars and cash equivalents, emphasizing their commitment to compliance through monthly attestation and reserve reports.
