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Paxos gets green light from Singapore regulator for USD stablecoinPaxos, a regulated crypto infrastructure company, has announced that it has received in-principle approval from the Monetary Authority of Singapore (MAS) for its new subsidiary, Paxos Digital Singapore Pte. Ltd.The company outlined in a press release that it published on Thursday that the new entity will be able to offer digital payment token services and issue a USD-backed stablecoin in compliance with Singapore’s upcoming stablecoin laws. Stablecoins are digital tokens that are pegged to the value of fiat currencies or other assets and are designed to minimize price volatility.Photo by Carlos Alberto Gómez Iñiguez on UnsplashRegulatory framework for stablecoinsThe MAS moved to finalize its regulation of stablecoins within the city-state in August. That regulation insists on stablecoin issuers holding reserve backing for a stablecoin in low risk, highly liquid assets. The regulator also puts an onus on the issuer to provide appropriate disclosures including audit results and to process redemption requests within five business days.According to Paxos, there is a strong global demand for the U.S. dollar, but it remains challenging for consumers outside the U.S. to access dollars securely, reliably and under regulatory protections. The in-principle approval from the MAS will enable Paxos to bring its regulated platform to more users around the world.The recently finalized stablecoin regulatory framework will apply to non-bank issued tokens that are linked to the Singapore dollar or G10 currencies, such as the euro, British pound and U.S. dollar. Additionally, it applies to stablecoins whose circulation exceeds five million Singapore dollars ($3.7 million). The framework aims to ensure that stablecoins are subject to appropriate governance, risk management, disclosure and consumer protection standards.Partnering with enterprise clientsPaxos said that once it receives full approval from the MAS, it will be able to partner with enterprise clients to issue the USD stablecoin in Singapore. Paxos already has experience in issuing stablecoins, such as the Paxos Standard (PAX) and the PayPal USD Coin (PYUSD), which are both backed by the U.S. dollar and cash equivalents. Paxos also issues monthly attestations and reserve reports to verify its compliance and transparency.Responding to this latest development, Paxos Head of Strategy, Walter Hessert, stated:“Global demand for the US dollar has never been stronger, yet it remains difficult for consumers outside the US to get dollars safely, reliably and under regulatory protections. This in-principle approval from the MAS will allow Paxos to bring its regulated platform to more users around the world. 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.”Paxos previously issued the Binance USD (BUSD) stablecoin, but was ordered by the New York Department of Financial Services (NYDFS) to stop issuing the token after the agency declared the stablecoin an unregistered security.The partnership between Paxos and the MAS is a significant step in bridging the gap between traditional finance and the emerging crypto industry. As more institutional clients seek exposure to digital assets, it becomes essential to provide them with secure and reliable solutions that meet their specific requirements.

Chinese authorities are gearing up for a significant amendment to the country's anti-money laundering (AML) regulations, with a specific emphasis on cryptocurrency-related transactions. Growing concerns about cryptoThe move, reported by Chinese business and financial news media outlet Jiemian on Wednesday, comes in response to growing concerns among policymakers in China about the need for heightened scrutiny within the burgeoning crypto industry. This marks the first substantial update to China's AML rules since their introduction in 2007. In 2021, China took a decisive step by imposing a comprehensive ban on cryptocurrency use, which included prohibiting offshore exchanges from offering services and putting a stop to all forms of mining. However, despite these restrictions, mainland users have managed to find avenues to access the crypto market. The upcoming amendment to AML regulations aims to introduce more stringent guidelines to address and mitigate these activities effectively. Prime Minister Li Qiang chaired an executive meeting of the State Council on Jan. 22 to deliberate on the revised AML law. The initial draft of the AML regulations was proposed in 2021. The revised version is set to become law by 2025 after being included in the legislative agenda of the State Council for 2023.Photo by Max van den Oetelaar on UnsplashDigital assets not clearly definedUrgency was stressed in addressing cryptocurrency money laundering at the legal level, as the current laws lack a clear definition of digital assets. Although the revised draft includes measures to prevent digital asset money laundering, concerns were raised about the absence of operational guidance on subsequent actions such as asset seizure, freezing, deduction and confiscation in money laundering cases involving digital assets. Experts noted that there is room for improvement in combating digital asset-related money laundering. China's existing AML law is designed not only to deter money laundering but also to protect fiscal order and combat related crimes. As a country with a deep understanding of money laundering and terrorist financing risks, China is not included in the Financial Action Task Force's (FATF) list of AML-deficient countries. However, a 2019 FATF report suggested that China should focus more on addressing the laundering of crime proceeds and expand its resources for national risk assessment. Circumventing the banDespite the formal ban on cryptocurrency circulation and mining by Chinese authorities, there are still avenues for Chinese nationals to access the digital asset ecosystem. BitMEX founder Arthur Hayes recently indicated that wealthy Chinese individuals have access to banking in Hong Kong, serving as the gateway for mainland China to global capital markets, including the cryptocurrency markets. While many crypto miners left the jurisdiction following the ban in 2021, Chinese companies account for a significant proportion of mining equipment manufacturing. Major exchanges like Binance and OKX have Chinese roots, underscoring the nation's influence in the global crypto landscape. Before the cryptocurrency trading ban in China, trading volumes on yuan-denominated crypto exchanges surpassed those of dollar pairs. As China prepares to fortify its AML regulations, the crypto industry awaits further clarity on how these changes will shape the landscape and influence the conduct of cryptocurrency-related activities within the country.  

Malaysian Prime Minister Datuk Seri Anwar Ibrahim has said that Malaysian government agencies and the country’s central bank need to study blockchain and cryptocurrency from a policy perspective so as not to get left behind.Photo by Esmonde Yong on UnsplashConsidering major changesHis comments emerged alongside the news that Anwar had discussed digital finance policy matters with Abu Dhabi government officials and with Changpeng Zhao (CZ), the founder and former CEO of Binance. According to the New Straits Times, an English-language newspaper published in Malaysia, the Malaysian government is homing in on the establishment and adoption of a formal policy relative to digital assets and blockchain.  Anwar confirmed that discussions also related to “digital transformation, data centers and artificial intelligence (AI),” and that the demands that Malaysia now faces require the government to consider major changes. In discussion with local media, Anwar stated: "I proposed several months ago how our agencies, including security, treasury and Bank Negara study how Malaysia can explore this so we aren't left behind. Ensuring that is regulated could safeguard the people's interests and prevent leakages.” Crypto-friendly regulationsAnwar added that a “radical departure from the old ways” would be needed for Malaysia to remain competitive, emphasizing the need for the Southeast Asian country to keep up to speed through the application of crypto-friendly regulations. Addressing the pace of technological change, he stated: “This is an evolution which happens quickly and requires us to be equally fast. We feel that Malaysia should not be left behind while mired in an old financial system.” In moving towards setting out a clear policy relative to digital assets, the Malaysian prime minister is encouraged by his recent dialogue with United Arab Emirates (UAE) government officials. He said that they confirmed that they feel they can forge close cooperation with Malaysia on the matter. Anwar added:“We need to discuss this in detail, leave behind the old business model and give meaning to this digital finance policy.” Taking to the X social media platform, Binance’s CZ described the nature of his discussion with the Malaysian prime minister, stating: “The discussions were not about Binance but about the crypto industry and Malaysia, including regulations, policies, risks, and collaborations between industries and across national borders. Forward!” A pseudonymous crypto investor and programmer, @darren_com_my, responded to CZ’s tweet to explain that the Malaysian government provides support to the digital assets industry via government agencies, but that, on the other hand, it has blacklisted a number of exchanges such as HTX (formerly Huobi) and Binance.  The local regulator has issued licenses to six virtual asset service providers. In recent weeks, Malaysia’s Securities Commission has taken action against global exchange Bybit and crypto app Atomic Wallet, prohibiting them from trading within the jurisdiction due to both companies not having obtained the required licensing.