Singapore’s largest bank, DBS Group Holdings, has announced its entry into the cryptocurrency industry with stablecoins.
According to Bloomberg, DBS will provide custody services for stablecoin reserves and offer related cash management services.
This move comes through a partnership with Paxos Trust Co.’s local unit. Paxos had also recently received a license from the Monetary Authority of Singapore (MAS).
Singapore’s Push for Crypto Innovation
This development is part of Singapore’s broader strategy to foster productive uses of blockchain technology. The country has also been working to enhance its status as a global financial hub.
Singapore has been actively developing regulations to protect investors and encourage innovation in the digital asset space.
Stablecoins are pegged 1-1 to major currencies and backed by reserves like cash and bonds. The stablecoin market is currently valued at about $162 billion.
Data from CoinGecko shows that Tether’s USDT and Circle’s USDC dominate the space. Paxos, though a smaller player, issues USDP and PayPal’s PYUSD.
Singapore’s regulatory approach includes capital, reserve, and disclosure requirements for stablecoin issuers. This aims to prevent incidents like the TerraUSD collapse that shook the crypto world.
This partnership between DBS and Paxos marks a major step in the development of Singapore’s digital asset ecosystem. The announcement comes at a time when several developments are happening in the stablecoin sector.
Stablecoin issuer Circle announced yesterday that it is now an authorized e-money issuer in compliance with MiCA regulations. It also makes USDC the first stablecoin to be compliant with the MiCA regulations.
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