Paxos received the in-principle approvals (IPAs) of the Financial Services Regulatory Authority (FSRA) in the Abu Dhabi Global Market (ADGM) to offer USD-backed stablecoins among other crypto services.
In a bid to expand its crypto-related services in the Middle East, Paxos Trust Company LLC has announced that it has received the necessary regulatory approval to offer fiat-backed stablecoins in the United Arab Emirates (UAE). According to the announcement, Paxos will continue with its asset tokenization plan in Abu Dhabi after securing in-principle approvals (IPAs) from the country’s Financial Services Regulatory Authority (FSRA). As a result, Paxos can operate through the Abu Dhabi Global Market (ADGM) to offer fiat-backed stablecoins, more so the USD-pegged.
Paxos in the UAE
The move by Paxos is in line with its founding principles of expanding to global markets as the crypto market gets adopted by mainstream investors.
According to Walter Hessert, Paxos’ head of strategy, the regulatory approval in the UAE marks a major milestone towards onboarding billions of users to the web3 and blockchain technology. Moreover, blockchain technology is fast revolutionizing the global financial system through secure, and innovative solutions.
“Our IPAs from the FSRA, on the heels of our IPA from the Monetary Authority of Singapore, solidify our commitment to pursuing international growth through regulated frameworks. Paxos is unique in the industry for this approach and we will continue expanding our regulatory licensing to serve global enterprises as a trusted, innovative partner,” Hessert noted.
Paxos and the Stablecoins Market
Paxos provides users with stablecoins that are backed 1:1 with the respective fiat currencies, and redeemable at any time. The company’s blockchain infrastructure is used by many institutional investors including PayPal Holdings Inc (NASDAQ: PYPL), Interactive Brokers Group Inc (NASDAQ: IBKR), Mastercard Inc (NYSE: MA), Mercado Libre, Nubank, Bank of America Corp (NYSE: BAC), and Societe Generale, among others.
Some of Paxos’ leading products include the PayPal USD (PYUSD), Pax Dollar (USDP), and the Pax Gold (PAXG). As of this report, the USDP had a total market cap of about $444 million, while the PYUSD had a total valuation of approximately $158 million and a 24-hour trading volume of around $4.4 million.
Meanwhile, Paxos found itself entangled with the Binance war with the United States for minting the BUSD, which was declared a security. Nonetheless, the BUSD conversion to other cryptocurrencies is still available on Binance and Paxos still offers the redemption to USD.
The company has been able to dominate the institutional stablecoins market for its vast regulated operations and utmost transparency. Additionally, the company is well funded by top venture capitalists including Oak HC/FT, Declaration Partners, Founders Fund, Mithril Capital, and PayPal Ventures, whereby it raised more than $540 million to fund its operations.
With the regulatory approval in UAE, Paxos can now compete with other stablecoins issuers like Circle (USDC) and Tether (USDT) which have dominated the Web3 industry for years.