StraitsX has obtained In-Principle Approval (IPA) from the Monetary Authority of Singapore (MAS) as a Major Payment Institution (MPI).
Much like the others that have acquired the MPI license in Singapore before it, such as GSR, Coinbase, and Ripple, this approval allows StraitsX to operate as a licensed provider for digital payment token services.
The license is specifically for issuing XSGD and XUSD, stablecoins pegged at 1:1 to the Singapore Dollar and US Dollar, respectively.
StraitsX states this approval will allow it to align with MAS’ upcoming stablecoin regulatory framework.
Presently, XSGD is issued by Xfers Pte. Ltd. and is actively traded on the StraitsX platform.
The company states that the release of XUSD is anticipated in the near future.
Having significant experience in managing stablecoins, StraitsX indicates that they will ensure compliance with key requirements, so as to adhere to MAS’ forthcoming Single-currency pegged stablecoin (SCS) regulatory framework.
Total supply of XSGD, as of point of publication, is just above 33 million – with about 21.5 million on Ethereum, 8 million on Polygon and about 3.5 million on Zilliqa.
StraitsX sets a 1:1 peg of its stablecoins to underlying currencies, with reserves held in cash or MAS and U.S. Treasury-issued debt securities.
Rigorous, bi-monthly independent audits of reserve assets, conducted by certified public accountants in Singapore, provide assurance of compliance with regulatory requirements.
These reserve assets are segregated from StraitsX’s corporate assets.
These assets are held in custody with a financial institution licensed or regulated by MAS to provide custodial services, guaranteeing the right of holders to redeem the value of stablecoins directly with them or appointed distributors.
Withdrawal of fiat currency to a whitelisted bank account is assured within 5 business days of a legitimate redemption request.
The issuer then maintains a base capital at all times, equivalent to the higher of SGD 1 million or 50% of its annual operating expenses.
This capital, held in liquid assets, undergoes annual external audits to ensure adequacy in case of recovery or winding up.
StraitsX has facilitated a total of 7.8 billion XSGD since October 2020.
Coinlive previously reported on how the company worked with ride-hailing giant Grab and UOB to create the SG Pitstop pack – it being an example of purpose-bound money.
These initiatives align with MAS’ Project Orchid, illustrating the potential for special conditions in digital money transfers.