SINGAPORE - Cryptocurrency brokerage Paxos has received initial approval from the Monetary Authority of Singapore (MAS) to issue a U.S. dollar-backed stablecoin, marking a significant step in the company's expansion efforts in Asia. This in-principle approval under the Payments Services Act (PSA) allows Paxos to offer digital payment token services while awaiting full authorization.
Walter Hessert, Paxos' Head of Strategy, emphasized the strong global demand for U.S. dollars, which non-U.S. consumers often struggle to access safely and reliably. He indicated that Paxos' new offering is poised to cater to this demand, especially during a period where the appetite for stablecoins is on the rise. To ensure transparency, Paxos commits to publishing monthly attestation and reserve reports for its stablecoins.
The brokerage firm Bernstein has projected a dramatic increase in the stablecoin market, expecting it to balloon from $125 billion to an astounding $2.8 trillion within the next five years. Paxos aims to capitalize on this growth by collaborating with enterprise clients to launch its USD stablecoin in Singapore upon receiving full regulatory sanction.
This move comes as part of Paxos' broader strategy to extend its international footprint, having already facilitated the issuance of PYUSD, a USD-backed stablecoin for PayPal (NASDAQ:PYPL), introduced on August 7. The company's relationship with stablecoins also includes minting Binance's now-defunct BUSD until it was ordered by the New York Department of Financial Services to cease issuance due to regulatory concerns.
Paxos' journey in Singapore began over a year ago when it received an operating license allowing it to provide tokenization, custody, and trade services. The recent PSA approval builds on this foundation and aligns with MAS' final rules for stablecoins released on August 15, targeting non-bank tokens linked to G10 currencies with circulation exceeding $3.7 million.
As Paxos awaits full approval from MAS, the company's strategic movements suggest a keen focus on establishing a strong presence in the rapidly evolving digital currency landscape of Singapore and beyond.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.