Paxos's blockchain infrastructure platform has agreed to acquire Membrane Finance, a Finnish Electronic Money Institution. After regulatory approval, this transaction will allow Paxos to enter the European Union.
A stablecoin issuer with a coveted license
The acquisition of Membrane Finance will help Paxos become a fully licensed Electronic Money Institution in Finland and the EU, thanks to the license held by Membrane Finance from the Finnish Financial Supervisory Authority. This license is recognized in 30 European countries. Walter Hessert, Paxos's Chief Strategy Officer, stated:
"Stablecoins are becoming increasingly popular in the market as new applications emerge for everyday users. […] With Membrane, we expect to expand our reach to EU customers looking to leverage the benefits of stablecoins."
Membrane Finance is the issuer of EUROe and eUSD stablecoins. EUROe was launched in February 2023, but did not see immediate high demand. Stasis, Circle, Tether, and Celo are also issuers of euro-pegged stablecoins.
There are other tokens sharing the name eUSD. Among them, Membrane Finance's eUSD is somewhat less active.
Paxos owns tokens pegged to the USD and gold, but does not yet have a euro.
Paxos is the issuer of Pax Dollar (USDP) under the supervision of the New York State Department of Financial Services. Additionally, Paxos International introduced Lift Dollar (USDL) – a yield-generating stablecoin – under the supervision of the Abu Dhabi Global Market in June. Paxos Singapore began issuing Global Dollar (USDG) along with DBS Bank with the approval of the Monetary Authority of Singapore on November 1.
Also in November, an alliance of cryptocurrency and traditional financial companies, including Robinhood, Galaxy Digital, Kraken, and Paxos, was formed to "accelerate and promote the adoption of global stablecoins." They specifically target USDG.
Paxos also issues a cryptocurrency PAXG, backed by gold they hold in reserves.
The European stablecoin market operates under the regulation of the Markets in Crypto-Assets Regulation (MiCA). MiCA's stablecoin regulations came into effect on July 1. One day before Paxos announced the acquisition of Membrane Finance, Quantoz – a Dutch fintech – issued USD-pegged (USDQ) and euro-pegged (EURQ) stablecoins in compliance with MiCA, backed by Tether, Kraken, and Fabric Ventures, with the approval of the Dutch central bank.
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