The financial services company Paxos recently attained critical preliminary green lights from Abu Dhabi Global Market (ADGM) authorities to expand their stablecoin offerings in the region.
These provisional approvals from the Financial Services Regulatory Authority (FSRA) pave the way for Paxos to issue new fiat-backed stablecoins pegged to currencies like the US dollar. Additionally, Paxos gained initial clearance to provide centralized crypto brokerage and custody services out of newly regulated ADGM entities.
Gaining these regulatory footholds in Abu Dhabi represents a major component of the Paxos strategy to extend their compliant stablecoin solutions across the United Arab Emirates. The company aims to leverage full ADGM approvals to enhance the adoption of trustworthy, redeemable stablecoins backed 1:1 by reserves across UAE crypto markets thirsty for dependable liquidity.
Paxos frames attaining these provisional approvals as consistent with their proven model of pursuing regulatory oversight first rather than asking for forgiveness later. The company asserts maintaining modern anti-money laundering controls and stringent know-your-customer verification standards to properly align with top-tier financial jurisdictions like Singapore and the United States.
Head of Strategy Walter Hessert touted this ADGM in-principle acceptance as cementing Paxos’s commitment to seeking international expansion solely within responsible, regulated confines. He portrayed the approvals as confirming the promise of blockchain innovations in progressively transforming legacy financial rails if developed judiciously under prudent regulatory purview.
However, some decentralization purists may question whether an increasingly regulated future centered on permission blockchains, licensed stablecoins, and CBDC-powered payments significantly diverges from the original vision of itcoin">Bitcoin and Ethereum in enabling user-controlled money outside governmental or institutional intermediation. Nonetheless, Paxos continues gaining traction globally as regulated DeFi forges ahead interfacing with traditional finance.
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