Paxos has received full approval from the Monetary Authority of Singapore (MAS) to issue a stablecoin under the regulator’s upcoming stablecoin framework.
With this approval, Paxos To provide digital payment token services through our company, Paxos Digital Singapore Pte Ltdas a major clearing house.
The approval makes Singapore one of the markets where Paxos can issue stablecoins, joining the United States and the United Arab Emirates, as the company works to expand its global footprint.
Paxos has selected DBS Bank, Southeast Asia’s largest bank by assets, as its primary banking partner for cash management and safekeeping of its stablecoin reserves.
Walter Hessert
Walter Hessert, Head of Strategy at Paxos, said:
“Stablecoins issued to standards set by regulators such as MAS, which are renowned for their rigorous regulatory standards, represent an important step towards democratizing access to commerce and financial services.”
Receiving approval from the MAS marks an important step for Paxos and our global enterprise partners as we securely provide access to US dollars to more users around the world.”
Evi Tunis
Evi Tunis, Head of Digital Assets, Institutional Banking Group DBS BankSaid,
“We firmly believe that trust and security are key to the wider adoption of stablecoins. Having considered all the relevant aspects that come with managing reserve assets, stablecoin issuers will find that our solution can help them meet the rigorous standards expected by regulators and customers.”
This partnership further expands DBS’ broader engagement across the digital asset ecosystem as a pioneer and innovator for many years.”
This development is similar to the previous announcement In November 2023, Paxos, together with StraitsX, received In-Principle Approval (IPA) from the MAS to issue stablecoins.
Stablecoins, including StraitsX’s XSGD and XUSD, which are pegged to the Singapore dollar and the US dollar respectively, as well as Paxos’ new US dollar-pegged stablecoin, are set to become “MAS-regulated stablecoins” under the proposed legal changes.
Under the MAS proposed stablecoin regulatory framework, these stablecoins will have to adhere to strict requirements, including a value stabilisation mechanism to ensure that each stablecoin is backed by reserve assets equivalent to at least 100% of the stablecoin issued.
Furthermore, these assets will be subject to independent audits every two months, with reports published on the companies’ websites and kept separate from corporate assets by MAS-regulated financial institutions.
The framework also includes an exchange mechanism that guarantees holders the right to exchange their stablecoins for an equivalent fiat currency within five business days of a valid request.
In addition, companies are required to maintain a base capital, assessed annually, to ensure sufficient liquidity for business recovery and orderly liquidation.
