Paxos has received initial approval from the Monetary Authority of Singapore (MAS) for its new venture, Paxos Digital Singapore Pte. Ltd. This milestone signifies Paxos’ inaugural entry into the Asian market establishes it as a trailblazer in launching a platform for a US dollar-backed stablecoin in Singapore.
The approval from MAS allows Paxos to proceed with its plans to introduce this stablecoin, marking a significant step in the company’s expansion strategy and its commitment to regulatory compliance in the region.
Stablecoins are cryptocurrencies designed to maintain a stable value by pegging their price to a separate asset class, such as the U.S. dollar or gold. They aim to reduce the volatility commonly associated with other cryptocurrencies like Bitcoin, making them more suitable for everyday transactions and transfers.
Stablecoins can be backed by real-world assets, use algorithms to control supply, or maintain reserve assets as collateral. They play a significant role in decentralized finance (DeFi) by offering price stability, efficient global fund transfers, and a reliable store of value.
Their stability and pegged value make them suitable for various use cases, including commercial payments, remittances, recurring payments, long-term loans, stores of value, and trading.
The Monetary Authority of Singapore (MAS) has recognized the new stablecoin proposed by Paxos Digital Singapore as substantively compliant with its upcoming stablecoin regulatory framework.
This acknowledgement precedes the implementation of the legislative framework, showcasing Paxos’ proactive adherence to regulatory standards.
Paxos said that once granted full approval, it plans to collaborate with enterprise clients to launch the USD-backed stablecoin in Singapore, contributing to the widespread adoption of stablecoins and their integration into mainstream usage.
Walter Hessert, Paxos Head of Strategy, said that despite the robust global demand for the US dollar, obtaining dollars securely and reliably is challenging for consumers outside the US, especially while adhering to regulatory protections.
The in-principle approval from the MAS enables Paxos to extend its regulated platform to a broader international user base, addressing the difficulties faced by users worldwide in accessing US dollars safely and in compliance with regulatory standards.
Paxos is a regulated blockchain and digital asset solutions provider for global leaders in financial services. Paxos Trust Company issues stablecoins, including PYUSD, PayPal’s stablecoin designed for payments, and PAXG, which is backed by one fine troy ounce of gold stored in LBMA vaults.
Paxos is also known for its contributions to computer science, particularly the Paxos consensus algorithm, which is a family of protocols for solving consensus in a network of unreliable or fallible processors.
Its algorithm enables a distributed set of computers to achieve consensus over an agreed-upon value, and it has been used in various applications, including distributed databases and blockchain networks.
