In a recent development, the stablecoin issuers Circle and Paxos have received approvals in Singapore. According to the report, the Monetary Authority of Singapore (MAS) signed the licenses for the firms.
Regulatory licenses and approvals have become mandatory in almost all jurisdictions for crypto-related companies. Most countries are using regulatory approvals as a measure to monitor and control the operations of the firms.
The regulators scrutinize the services and products the companies offer to checkmate fraudulent activities such as money laundering and rug pulls. Also, the regulators do this to enhance the security of investors’ funds.
They prioritize protecting their citizens’ money as well as controlling illegal transactions. That’s why crypto firms strive to receive regulatory approvals to ensure continuous operations in the States they operate.
Virtual Payment Token Products Through License Approvals
The two stablecoin issuers announced their license approvals. The license will allow the firms to offer their respective coins and virtual payment token products in Singapore. While Circle is the issuer of USD Coin (USDC), Paxos is Pax Dollar’s (USDP) issuer. Both stablecoins are pegged to the US dollar.
Circle got in-principle approval for a Major Payments Institution License. This will enable the company to engage in domestic and cross-border payments. Also, it would start issuing crypto assets in Singapore. On the part of Paxos, its approved license is for the provision of digital payment token services.
Over the last week, the MAS issued two consultation papers on proposals for some regulatory measures. The details are regarding regulating digital payment token service providers and stablecoin issuers under Singapore’s Payment Service Act (PSA).
In 2019, the Singapore Parliament passed the PSA. It purports to regulate the country’s payment systems while authorizing MAS to supervise the activities of payment service providers.
Significance Of License Approvals For Circle And Paxos
The CEO of Paxos Asia, Rich Teo, expressed his excitement over the license approval for his company. He stated that they plan on enhancing consumer adoption of virtual assets globally through collaborations with prominent enterprises worldwide.
The Chief Strategy Officer and Head of Global Policy at Circle, Dante Disparte, reported the benefits of the approval. He noted the firm’s license would create a higher potential for digital assets. Also, Singapore will witness positive changes in payment systems that will ensure economic growth.
On his part, the CEO and co-founder of Circle, Jeremy Allaire, mentioned that Circle just got a license from one of the leading global financial hubs. According to Allaire, this will facilitate the company’s expansion goals in achieving economic prosperity in regional and global aspects.
Crypto regulations in Singapore were on a tighter level by ending of 2021. MAS disqualified more than 100 out of 170 applicants during the period.
Also, the regulator employed more strict regulatory measures following the crypto crisis in the first half of 2022. This bearish trend caused the bankruptcy of some Singapore-based firms, such as Three Arrows Capital (3AC).
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