Paxos Secures License In Singapore Amid Plans Of Developing A USD Backed Stablecoin

Paxos has secured a preliminary license in Singapore by local authorities, paving the way for Paxos Digital Singapore Pte. Ltd. to initiate digital payment token services under the Payments Services Act while awaiting final approval.

A growing demand for stablecoins

In response to the increasing global demand for stable digital currencies, Paxos plans to develop a stablecoin backed by the United States Dollar (USD) in Singapore once full authorization is granted. Walter Hessert, Paxos Head of Strategy, emphasized the challenges faced by those outside the United States in accessing and using USD securely and in compliance with regulations.

In alignment with the growing demand for stablecoins, Paxos regularly discloses reports on the reserves and attestations of its stablecoins. This licensing development aligns with the recent clearance given to Paxos within Singapore to offer tokenization, custody, and trading services. Industry experts predict substantial growth in the stablecoin market, projecting an increase to $2.8 trillion over the next five years.

Room for improvement

In the past year, cryptocurrency usage among the average person in Singapore remained low, with slower growth compared to emerging markets like Vietnam and the Philippines. Singapore dropped to the 76th spot in the 2023 Global Crypto Adoption Index by Chainanalysis, ranking 63rd in 2022. Meanwhile, Hong Kong, aspiring to be a crypto hub, fell to 47th place.

The index, assessing grassroots crypto adoption, highlights countries where individuals invest a significant portion of their wealth in cryptocurrency. The central and southern Asia-Oceania region dominates the index, with India leading, followed by Nigeria, Vietnam, and the United States. Despite global recovery since late 2022, grassroots adoption is still below its peak, although several SEA (Southeast Asian) countries like Singapore and Hong Kong are steadily gaining momentum.