Paxos Will Launch a New USD-Backed Stablecoin in Singapore
Following initial approval by Singapore’s Monetary Authority, Paxos plans to roll-out its US dollar-backed stablecoin in the city-state.
Paxos, a leading crypto infrastructure company, has received preliminary approval from the Monetary Authority of Singapore (MAS) to issue a USD-backed stablecoin in Singapore. The new entity, bearing the name Paxos Digital Singapore Pte. Ltd, has been established to comply with Singapore’s recently finalized stablecoin regulatory framework and facilitate partnerships with enterprise clients to issue the stablecoin in the country.
The firm has experienced a strong demand for USD globally, but the difficulty for consumers outside the U.S. to acquire dollars securely, reliably, and under regulatory protections has been a major hurdle, according to Walter Hessert, Paxos head of strategy. This conditional approval from the MAS could potentially pave the way for Paxos to extend its regulated platform to a broader user base across the globe.
The Monetary Authority of Singapore (MAS) announced its final regulatory framework for stablecoins on August 15, targeting non-bank issued tokens pegged to the Singapore dollar or any G10 currency, such as the euro, British pound, and U.S. dollar. The regulation applies to any stablecoin with a circulation exceeding 5 million Singapore dollars ($3.7 million).
Just a week before the announcement from the MAS, PayPal launched its USD-backed stablecoin — PYUSD — issued by Paxos. However, Paxos, which previously backed Binance’s now-defunct BUSD stablecoin, was ordered by the New York Department of Financial Services to stop issuing the token after it was declared an unregistered security.
Paxos reassured users that its stablecoins are fully backed by the U.S. dollar and cash equivalents. To maintain transparency and ensure regulatory compliance, the company produces monthly attestations and reserve reports.
One of Paxos’s other offerings is a USD-backed stablecoin named USDP, issued from the United States. Paxos Digital Singapore Pte. Ltd. is the second Singapore-based regulated entity belonging to Paxos. The first entity received a license from MAS last year to provide digital payment token services under Singapore’s Payment Services Act 2019.
Having raised over $540 million in overall funding to date, Paxos enjoys the backing of high-profile investors, including Bank of America, Peter Thiel’s Founders Fund, and Coinbase Ventures. The company’s latest Series D round in 2021 valued Paxos at $2.4 billion.
