Recently, two cryptocurrency companies announced that they have obtained the Monetary Authority of Singapore (MAS)'s in-principle approval (IPA) to provide digital asset-related services in compliance with regulatory requirements. Through the licensing program under the Payment Services Act of the city-state of Singapore, MAS regulates seven types of payment services, including account issuance, domestic funds transfer, cross-border funds transfer, merchant acquisition, electronic money issuance, digital payment tokens and currency exchange.
Singapore-based StraitsX received a license as a major payment institution (MPI) for digital payment token services, while Taiwan’s XREX’s Singapore entity received approval for six service categories, in addition to currency exchange services.
After obtaining the license, StraitsX will focus on issuing two single-currency stablecoins (SCS) pegged 1-1 to the Singapore Dollar (XSGD) and the US Dollar (XUSD). XSGD can currently be minted and redeemed through StraitsX's platform, while XUSD is under development and will be released to the public in the near future.
“MAS’ in-principle approval allows us to demonstrate compliance with the regulatory framework for stablecoin issuance,” said Kenny Chan, director of StraitsX. “We see single-currency pegged stablecoins as a trusted and reliable medium that can help drive innovation in domestic and cross-border payment transactions,” he added.
XREX's business focus is cross-border payment technology based on blockchain. The Taiwan team will use XREX Singapore as their Asia-Pacific headquarters and seek to expand its payment products that support fiat currencies, stablecoins and cryptocurrencies.
Christopher Chye, chief executive officer (CEO) of XREX Singapore, told the FA that the approval process would take about two years, which he described as a “tough struggle” in a company news release. He also said the team is working to upgrade the in-principle approval to a full license.
“Blockchain technology has the potential to eliminate transaction fees, facilitate atomic settlements, and enable programmable money,” Chye said. “Stablecoins in particular hold great promise to address liquidity issues, and we look forward to engaging our clients and potential clients in the near future,” he added.
According to the statement, the XREX Group team claims to be the only digital asset player approved by regulators in Singapore and Taiwan to provide virtual asset services. Chye said the compliance team has been studying the licensing system formed in the United Arab Emirates (UAE) and closely following regulatory developments in Hong Kong.
“Singapore has a progressive and robust regulatory framework that provides our users with the clarity and confidence they need to access digital assets and use stablecoins,” Nick Chang, head of compliance at XREX Group and XREX Singapore, said in the statement.
Chye added: “We are optimistic about regulatory developments in various jurisdictions and the attention being given by central banks. Clear, sensible and practical regulations are essential for the development of the blockchain industry.”