Paxos, a US-based fintech focused on blockchain and tokenization infrastructure, has secured the regulatory in principle approval (IPA) from the Monetary Authority of Singapore (MAS) for its new Singapore entity, Paxos Digital Singapore Pte. Ltd., to offer digital payment token services. The Singapore entity will issue a new US dollar stablecoin fully backed 1:1 by the US Dollar and cash equivalents.
Operating under the regulatory oversight of the New York Department of Financial Services (NYDFS) in the United States and the Monetary Authority of Singapore (MAS), Paxos (website) demonstrates a strong alignment with stringent regulatory frameworks, a critical aspect for fintech companies in today’s market.
Financially, Paxos is robust, having secured over $540 million from key investors such as Oak HC/FT, Declaration Partners, Founders Fund, Mithril Capital, and PayPal Ventures. This level of funding places Paxos in a strong position within the fintech sector. The company’s operational presence spans New York, London, and Singapore, indicating a strategic approach to global market penetration.
The approval in Singapore marks a crucial step in the company’s expansion, allowing it to offer digital payment token services, including a new US dollar stablecoin. Notably, this stablecoin has been recognized by MAS as compliant with its forthcoming stablecoin regulatory framework, a commendable achievement ahead of the framework’s formal introduction.
Once full approval is granted, Paxos will be in a position to collaborate with enterprises in Singapore to issue the USD-backed stablecoin, a move that will likely influence the stablecoin market significantly. The company’s proactive stance on regulatory compliance underscores its commitment to transparency and integrity, aligning with global prudential regulators’ standards and enhancing democratized access to financial services.
In 2022, Paxos achieved a significant milestone by becoming the first US-based blockchain platform to secure a license from MAS under the Payment Services Act 2019.
Walter Hessert, Head of Strategy at Paxos, shed light on the growing global demand for the US dollar and the challenges in accessing it safely and reliably outside the US, particularly under regulatory protections. He underscored the significance of the MAS’s approval, which will enable Paxos to extend its regulated platform to a broader international audience.
All Paxos stablecoins are fully backed by the US Dollar and cash equivalents on a 1:1 basis, ensuring their stability and reliability. In line with its commitment to transparency, Paxos will issue regular attestations and reserve reports for its tokens, providing clear insights into the assets held by stakeholders.
