Circle and Paxos Obtain Payment Institution License in Singapore
Circle and Paxos, issuers of US dollar-pegged stablecoins, have received approval in principle from Singapore regulators to operate fully regulated cryptocurrency services in the country.
The IPA license allows the duo to provide digital payment token services under the Major Payment Institution (MPI) license. Licensees are required to meet a high level of compliance requirements to protect consumers.
According to a notice in the official government gazette, the new licenses come after a rigorous review and approval process conducted by MAS. Using the specific terms of the Singapore framework, the two crypto firms have now been approved, in principle, to receive a major payment institution license that allows them to provide digital payment token services.
The approvals granted to Circle and Paxos bring the number of crypto firms that have received the regulatory green light to 20, a fraction of nearly 180 applicants. The city-state’s de facto central bank, the Monetary Authority of Singapore (MAS), has been cautious about cryptocurrencies as it seeks to tackle money laundering and cybercrime .
Singapore regulators have said they may implement consumer protections for crypto investors, which could include suitability tests, restrictions on leveraged trading and credit facilities. They also repeatedly warned retail investors against putting their money in the market.
However, SAM updated its regulatory framework for crypto-related activities, including digital payments. The country’s Payment Services Act (PSA) covers all Singapore-based crypto businesses and exchanges, subjecting all crypto activities to anti-money laundering and anti-terrorist financing rules.
Rich Teo, Co-Founder and CEO of Paxos Asia, said, “We are honored to be one of the first US-based blockchain platforms to obtain this important license from MAS. We believe that blockchain and digital assets will revolutionize finance for everyone around the world, but the development of this technology must have clear oversight and consumer protections. We are delighted to have MAS as our regulator. Paxos will securely accelerate consumer adoption of digital assets globally in partnership with the world’s leading companies.
Paxos is a New York-based exchange and stablecoin issuer, whose status as a licensed financial services company in the United States allows it to offer different products, such as crypto trading and settlement, and custody services . In addition, the company can issue symbolic securities and also its customers to access the traditional banking system.
The unique position allowed Paxos to sign large corporate clients, such as Interactive Brokers, Revolut, Credit Suisse, Société Générale and StoneX. It has also partnered with the world’s most influential crypto exchange, Binance, to gain approval from the New York regulator to launch a USD-backed stablecoin.