The infrastructure blockchain company Paxos has obtained in-principle approval from MAS to issue a new stablecoin pegged to the U.S. dollar.
According to the statement, the asset is fully backed by U.S. dollars and cash equivalents. The firm has committed to undergoing monthly audits and providing reserve reports.
MAS deemed the stablecoin compliant with the regulator’s proposed framework even before its key provisions took effect, the press release states.
“Global demand for the U.S. dollar has never been stronger, yet consumers outside the United States still find it difficult to obtain currency in a safe and regulated manner,” said Walter Hesser, head of strategy at Paxos.
The company also adheres to strict AML and KYC standards set by the Singapore authorities.
In 2022, Paxos became the first American blockchain platform, to obtain a MAS license to provide digital payment tokens.
On February 10, 2023, the New York State Department of Financial Services initiated an investigation into the company. Later, the regulator ordered Paxos to halt the issuance of BUSD.
In August, the infrastructure company launched PayPal’s stablecoin PYUSD on the Ethereum blockchain. The asset has sparked a mixed reaction among crypto-community participants. Some argued that the coin would accelerate mainstream adoption of digital assets, while others pointed to centralisation risks.