Singapore approves Paxos to issue stablecoin
The Monetary Authority of Singapore (MAS) yesterday (7/1) approved stablecoin issuer Paxos to provide digital payment token services, symbolizing the company’s further expansion of its global influence. Paxos will issue the stablecoin locally through its Singapore subsidiary, Paxos Digital Singapore Pte. Ltd. According to MAS regulations, to obtain a major payment institution (MPI) license, an enterprise must have a base capital of S$250,000 and have a "permanent place of business or registered office" in Singapore, among other conditions.
So far, 21 companies engaged in cryptocurrency services or digital payment token services have obtained Singapore MPI licenses, including Blockchain.com, Circle, Coinbase, Ripple and XREX. Paxos has obtained licenses for its cross-border remittance services and digital payment token services, which means it can legally issue stablecoins in Singapore.
Paxos also announced that DBS Bank (DBS) will become its primary banking partner for cash management and stablecoin reserve custody. This collaboration not only strengthens Paxos’ business operations, but also demonstrates its determination to expand regulated, secure stablecoin issuance opportunities globally.
Paxos continues to expand global influence
Paxos already received licenses to issue stablecoins in the United States and the United Arab Emirates before receiving a license in Singapore. This approval makes Singapore the third major market where Paxos and its related entities can issue stablecoins.
Walter Hessert, head of strategy at Paxos, said: “Stablecoins issued under the standards of a regulator like the MAS, which is known for its strict regulatory standards, are an important step towards democratizing commerce and financial services.”
Last year, Paxos received in-principle approval from the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM), allowing the company to issue stablecoins backed by U.S. dollars and other currencies. Additionally, the approval grants Paxos the right to provide crypto brokerage and custody services. Paxos said it plans to further expand the global presence of its U.S. dollar-backed stablecoin.
In Argentina, Paxos launched a yield stablecoin called Lift Dollar ($USDL), a digital asset designed to maintain value against the U.S. dollar and provide users with daily yields on U.S. government securities and cash equivalents. Additionally, Paxos is partnering with Chainlink to drive adoption of PayPal USD ($PYUSD), a U.S. dollar-backed stablecoin designed to facilitate payments.
These moves by Paxos demonstrate that its stablecoin business is rapidly expanding its capabilities and gaining greater regulatory recognition and market acceptance around the world.
Image source: BlockHead
Global challenges and future prospects of stablecoins
While the successful licensing of Paxos in Singapore represents an important milestone for the stablecoin market, stablecoin issuers still face many challenges and uncertainties globally. The first is the license application process. The process of obtaining an e-money license or a banking license is often expensive and time-consuming. Additionally, stablecoin issuers must adhere to strict capital requirements, liquidity buffers, and risk management controls.
In addition, regulatory policies for stablecoins also vary across countries. Taking the EU as an example, MiCA regulations require stablecoin issuers to be authorized and licensed by relevant national authorities, and stablecoins that are deemed "important" based on certain indicators will face higher prudential requirements. These stablecoins will be directly regulated by the European Banking Authority (EBA) rather than national authorities.
With the rapid development of the stablecoin market, regulatory agencies in various countries are working hard to formulate policies to ensure the transparency and security of the market. One example is Singapore’s MAS, which demonstrated its determination to strike a balance between promoting innovation and protecting consumers by approving Paxos to offer digital payment token services.
Despite the challenges, stablecoins are growing in influence globally. Paxos’s approval by Singapore is not only a major affirmation of its own business, but also sets an example for other stablecoin issuers. As more countries and regions formulate relevant policies, stablecoins are expected to play a more important role in the future global financial system.
