Back in March, Paxos announced it received an in-principle license approval as a Major Payments Institution from the Monetary Authority of Singapore (MAS). And today it confirmed the license has been granted. Also today, Circle, the issuer of the USDC stablecoin, received its in-principle approval.
While the licenses are the same, Paxos provides a broader range of services. Apart from its own modest Paxos dollar (USDP) stablecoin, it is also the issuer of the Binance stablecoin (BUSD), which is the third largest.
The license covers Paxos crypto brokerage, stablecoins, and custody services in Singapore, expanding its services to Singapore residents and clients wishing to operate in Singapore. Its institutional clients include PayPal, Mastercard and EDXM, a new institutional crypto exchange backed by Schwab, Fidelity and Citadel Securities.
This license adds to other Paxos regulatory approvals, including a trust charter from the New York DFS and a preliminary national trust bank charter in the United States.
“From the start, we’ve been committed to innovating within regulatory frameworks,” said Rich Teo, Co-Founder and CEO, Paxos Asia. “We believe blockchain and digital assets will revolutionize finance for everyone around the world, but development of this technology must have clear oversight and consumer protections.”
Turning to Circle, Jeremy Allaire, the Co-Founder and CEO of Circle, said, “As one of the world’s leading financial hubs, Singapore is instrumental to Circle’s regional and global expansion plans in raising global economic prosperity.”
Circle is looking to expand its range of stablecoins. USDC is the second largest stablecoin and is already available on eight blockchains. It recently launched EUROC, which has a modest market capitalization of $77 million, but competitor Tether’s older euro stablecoin has also yet to attract a huge amount of usage. That’s mainly because the crypto markets are heavily dollarized. Circle sees itself as powering mainstream payments and when that happens, the Euro stablecoin usage should grow.
The unusual aspect of EUROC is it is based in the United States. When the new European MiCA legislation comes into force, it will require local approval. It recently hired Patrick Hansen to lead EU Strategy and Policy.
Meanwhile, last week MAS launched a consultation for regulating stablecoins. Apart from the usual criteria on high quality, liquid reserve assets, it will require all issuers to have sufficient capital to cover at least six months’ costs. The regulator recognizes that it has limited influence over multi-jurisdictional stablecoins, so it is considering requiring an annual attestation that the stablecoin in other jurisdictions can meet similar criteria to Singapore’s.
