Paxos, a crypto brokerage firm, has received preliminary authorization from Singaporean regulators to offer digital payment token services.
What Happened: Following this in-principle approval from the Monetary Authority of Singapore under the Payments Services Act (PSA), Paxos has established a new entity, Paxos Digital Singapore Pte. Ltd., to provide tokenization, custody, and trade services. After obtaining full approval, Paxos aims to collaborate with corporate clients to introduce a U.S. dollar-backed stablecoin in Singapore.
Additionally, the stablecoin issuer StraitsX also received similar preliminary approvals from Singapore and plans to launch a U.S. dollar-pegged token, while its current Singapore dollar stablecoin will be regulated, according to Bloomberg.
Read Next: EXCLUSIVE: Crypto-Friendly Bank CEO Defines 'The Only Thing That Makes Sense' In Stablecoin Rules
Why It Matters Amid rising demand for stablecoins, Paxos believes it will be able to expand its customer base and leverage the anticipated growth in the broader market. Bernstein sees the market growing from $125 billion to $2.8 trillion in the next five years, CoinDesk reported.
"Global demand for the US dollar has never been stronger, yet it remains difficult for consumers outside the US to get dollars safely, reliably, and under regulatory protections," Paxos Head of Strategy Walter Hessert said in a statement. "This in-principle approval from the MAS will allow Paxos to bring its regulated platform to more users around the world."
Japan and Hong Kong are also looking to position themselves firmly for stablecoin activity in Asia. Japan’s stablecoin law became operative on June 1, 2023, and banking giant Mitsubishi UFJ Financial Group was in talks with stablecoin-related companies in early 2023. Meanwhile, stablecoin rules in Hong Kong are due by 2023-2024.
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