Circle and Paxos, two stablecoin issuers, have both gotten permission from the Monetary Authority of Singapore (MAS), the city-central state's bank, for their separate licenses.
What changes are deemed occur due to this?
Paxos acquired its license to provide services for digital payment tokens. At the same time, Circle gained in-principle permission for a Major Payments Institution License allowing it to create cryptocurrencies and facilitate domestic and international payments. On November 2nd, Circle and Paxos announced their approvals, a week after the MAS published two consultation papers on ideas for regulating stablecoin issuers and providers of digital payment token services under Singapore's Payment Services Act (PSA). (1)
How did this act come to be ?
The Singaporean Parliament enacted the PSA in 2019, enabling MAS to monitor payment service providers' behavior while purporting to regulate payment systems. The creators of the USD Coin (UDSC) and Pax Dollar (USDP) (2), two U.S. dollar-pegged stablecoins, Circle and Paxos, respectively, will now be permitted to sell their respective stablecoins as well as other digital payment token goods inside of Singapore.
According to Dante Disparte, Circle's Chief Strategy Officer and Global Head of Public Polic, under the more open-minded regulatory environment, its approval is expected to increase the potential for cryptocurrencies and open payment systems to spur economic growth in Singapore. Circle's co-founder and CEO The license, in one of the world's major financial centers, will be "essential to Circle's regional and worldwide development goals in enhancing global economic prosperity," according to Jeremy Allaire.
What's next ?
Although it is unclear how many other businesses will follow in the footsteps of Circle and Paxos, the regulatory relief comes after MAS rejected more than 100 out of 170 applicants in late 2021 under the stricter system. Following the now-infamous scandal involving Singapore-based and bankrupt Three Arrows Capital (3), MAS went a step further in mid-2022, announcing that it would be "brutal and unrelentingly hard" on "bad behavior" from the cryptocurrency industry. MAS chief fintech Sopnendu Mohanty stated this.
Singapore is battling to reclaim its reputation as one of the more crypto-friendly nations. The largest bank in Singapore, DBS, has decided to increase the scope of its cryptocurrency trading services, demonstrating that it is still treading carefully for ordinary investors.