Singapore’s DBS Bank is reportedly set to begin a custody service for stablecoin reserves.
It’s part of a collaboration between the city-state’s largest lender and a local unit of cryptocurrency issuer Paxos Trust, Bloomberg News reported Tuesday (July 2), with the partnership also including cash management services.
An official from the bank told Bloomberg this move will deepen its ties to the digital asset space, with the announcement coming after Paxos received a license from the Monetary Authority of Singapore.
“We look forward to partnering leading stablecoin issuers for their cash management and reserve custody needs if they meet the regulatory requirements,” said Evy Theunis, head of digital assets at the institutional banking group at DBS.
Bloomberg notes that Singapore is trying to promote the use of crypto’s blockchain technology to strengthen its status as a world financial hub.
Stablecoins proponents argue they will make inroads into traditional finance because they make payments easier, faster and cheaper, though the report argues this is a claim that hasn’t been proven at scale.
Singapore last year emerged as something of an oasis for crypto companies that began looking overseas as regulators in countries like the U.S. increased pressure on the industry.
“It’s super frustrating that you see markets like we have here in Singapore … where the governments are partnering with the industry, and you’re seeing leadership providing clear rules, and you’re seeing growth,” Ripple CEO Brad Garlinghouse said during a conference there last summer. “And frankly that’s why Ripple is hiring there.”
As PYMNTS wrote earlier this week, crypto companies had been asking for regulatory clarity for years. Now, it appears as though they could be getting it, as the industry’s “wild west” days could be coming to an end with the advent of the European Union’s landmark Markets in Crypto-Assets Act (MiCA) regulatory requirements for stablecoin issuers.
“After all, the digital asset and cryptocurrency industry shows no sign of fading as we near the 21st century’s second quarter,” that report said.
“Having stricter disclosure requirements, regular audits of crypto firms and more robust capital reserve requirements will help build trust and transparency across the marketplace — and the EU’s implantation of MiCA’s provision for stablecoins puts the EU at the forefront of crypto regulation.”
Already, stablecoin issuer Circle announced on Monday (July 1) that it had obtained an Electronic Money Institution (EMI) license, becoming the first global stablecoin issuer to receive a license to issue dollar- and euro-pegged stablecoin tokens within the EU’s boundaries under the MiCA regulations.
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