The archive · Money & Fintech · Strategic decision · 2023–2024
Paxos wins Singapore's MAS stablecoin license, launches USDG with DBS
Singapore's MAS opened stablecoin licensing in 2023; Paxos took one of the first approvals, then launched USDG with DBS managing its reserves.
Paxos
What the business is
Regulated blockchain and tokenization infrastructure: Paxos issues dollar-backed stablecoins such as PayPal USD and Pax Dollar under US oversight, operates a UAE-regulated affiliate, and now runs MAS-licensed stablecoin issuance from its Singapore entity.
How it started
In August 2023 MAS finalized a stablecoin framework covering single-currency stablecoins pegged to the Singapore dollar or G10 currencies. Paxos moved immediately: it created Paxos Digital Singapore and in November 2023 took in-principle approval, one of only two firms to get it, alongside StraitsX. The entity was built so Paxos and enterprise partners could issue a new dollar stablecoin from Singapore, the way it already issued PayPal USD from New York.
What happened
In July 2024 MAS granted Paxos Digital Singapore full approval as a Major Payments Institution to offer digital payment token services, enabling issuance under the stablecoin framework. Singapore became Paxos's third licensed market after the US and the UAE, and DBS, Southeast Asia's largest bank by assets, was named primary banking partner for cash management and custody of stablecoin reserves.
How it ended up
On October 31, 2024, Paxos launched USDG, a Singapore-compliant USD stablecoin, initially on Ethereum, backed 1:1 by dollar deposits, short-dated US government securities and cash equivalents held and managed by DBS. Paxos said it would expand USDG to more chains and distribute it worldwide through exchanges and wallets.
Background
In August 2023 MAS finalized a stablecoin framework covering single-currency stablecoins pegged to the Singapore dollar or G10 currencies. Paxos moved immediately: it created Paxos Digital Singapore and in November 2023 took in-principle approval, one of only two firms to get it, alongside StraitsX.
In July 2024 MAS granted the Singapore entity full approval as a Major Payments Institution to offer digital payment token services, enabling issuance under the framework. Singapore became Paxos's third licensed market after the US and the UAE, and DBS, Southeast Asia's largest bank by assets, was named primary banking partner for cash management and custody of reserves.
On October 31, 2024, Paxos launched USDG, a Singapore-compliant USD stablecoin, initially on Ethereum, backed 1:1 by dollar deposits, short-dated US government securities and cash equivalents. Paxos said it would expand USDG to more chains and distribute it globally through exchanges and wallets.
What has to be true
- MAS rations status: when the framework landed, only two firms, Paxos and StraitsX, held in-principle approval, so filing early was the real barrier to entry.
- DBS custody made the stablecoin institution-grade: Southeast Asia's largest bank managing reserves answered the trust question regulators and customers ask.
- Singapore was Paxos's third regulated market after the US and the UAE; each license made the next cheaper and hardened its claim to be the most comprehensively regulated issuer.
- The bet chased dollar demand in Asia: MAS's framework covers G10-pegged stablecoins, letting Paxos offer US dollars to more users from a trusted jurisdiction.
What can be applied
A regulator that rations licenses hands the moat to whoever files early and brings a bank. Paxos converted MAS's framework into full approval, then used DBS custody to sell compliance as the product.
Aftermath
As of November 1, 2024, USDG traded on Ethereum with DBS managing its reserves, and Paxos said it planned distribution through exchanges and wallets worldwide. The Singapore license completed a three-market stack, the US, the UAE and Singapore, for a firm that had raised more than $540 million and was valued at $2.4 billion in 2021.
Sources
- Paxos to issue new USD-backed stablecoin in Singapore
- Paxos receives full approval from Singapore's central bank to issue stablecoins, partners with DBS Bank
- Paxos Secures Full Approval to Offer Digital Payment Token Services from Monetary Authority of Singapore; DBS to be Primary Banking Partner
- Paxos launches USD-backed USDG stablecoin with DBS Bank
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