Singapore has granted in-principle approval to blockchain infrastructure firm Paxos to issue a new stablecoin pegged one-to-one with the U.S. dollar.
According to the report, the asset will be fully collateralized by reserves of fiat currency and cash equivalents held by Paxos, which has has agreed to undergo monthly audits and provide a report on reserves
The Monetary Authority of Singapore’s approval marks regulatory acceptance of the stablecoin even before formal regulations are enacted.
“Because Paxos upholds the highest standards of compliance and oversight, global enterprises partner with us to power stablecoin solutions that drive their businesses and respond to their customers’ needs.” said Paxos Head of Strategy, Walter Hessert.
As part of the in-principle approval, Paxos has agreed to strict anti-money laundering and know-your-customer requirements mandated by Singapore.
Last year, Paxos became the first U.S. blockchain firm to be awarded a license for digital token services by the Monetary Authority of Singapore. However, Paxos faces investigations in New York, where regulators ordered it to cease issuing the stablecoin BUSD in February.
Additionally In septembern this year, Paxos launched the Ethereum-based PYUSD stablecoin for payments giant PayPal. The move sparked debate around whether corporate-backed stablecoins aid mainstream adoption or increase centralization risks.