Stablecoin issuer Paxos has received in-principle approval from Singapore’s central bank to offer digital payment token services in the city-state.

Paxos, the entity behind the U.S. dollar-pegged stablecoin Paxos U.S. Dollar (PUSD), has established a foothold in Singapore’s digital asset market. 

In a statement on Wednesday, Paxos said it had received in-principle approval from the Monetary Authority of Singapore (MAS) for its new Singapore-based entity, and plans to issue a new U.S. dollar-pegged stablecoin compliant with the central bank’s proposed regulatory framework. 

“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,” said Walter Hessert, Paxos’ head of strategy.

In August, the MAS disclosed some of the features that its upcoming regulatory framework for single-currency stablecoins. Stablecoins under the regime would need to hold reserve assets in low-risk, highly liquid assets in segregated accounts with eligible custodians. 

Interestingly, shortly after Paxos’ announcement, MAS Managing Director Ravi Menon made a speech at the Singapore Fintech Festival, saying that cryptocurrencies have “failed the test of digital money.” However, he suggested that well-regulated stablecoins could be an exception to the rule, naming Paxos’ new USD stablecoin as an example.

Earlier this year, Paxos was ordered to cease minting the Binance-branded BUSD stablecoin by the New York Department of Financial Services (NYDFS). Although Paxos abandoned that project, the firm partnered with payments giant PayPal to issue its PYUSD stablecoin.

Still, the U.S. Securities and Exchange Commission (SEC) clamped down on the effort not long after, issuing PayPal a subpoena ordering the firm to produce all documents related to PYUSD.