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USDC issuer Circle receives license to operate as a Major Payment Institution in Singapore

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(Kitco News) - Stablecoin firm Circle Internet Financial, which issues USD Coin (USDC), the second-largest U.S. dollar stablecoin by market cap, announced on Wednesday that they have received a license to operate in Singapore.

“Circle Singapore has obtained a Major Payment Institution (MPI) license from the Monetary Authority of Singapore (MAS),” the company wrote in the announcement. “The license allows Circle Singapore to offer digital payment token services, alongside cross-border money transfer services and domestic money transfer services in the city-state via its various products and services, including the Circle Account, which allows institutional customers access to USDC.”

Circle wrote that their Singapore affiliate’s approval for the MPI license “underscores Circle’s strong reputation as a responsible digital financial technology company” and called it “a huge step forward for the future of regulated, transparent, and trusted dollar digital currencies” in Singapore and for Asia.

“Singapore is integral to Circle’s global expansion and mission in raising global economic prosperity and through the frictionless exchange of value,” said Jeremy Allaire, Co-Founder and CEO of Circle. “We are honored to receive the MPI license from MAS, and we remain committed to being a part of Singapore’s dynamic economy by advancing the future of financial technology innovations in the city-state, uplifting its emerging technology and fintech sector, and creating business and career opportunities for its technology and financial industry talent.”

As a licensed entity, Circle Singapore can now fully leverage its corporate affiliates’ expertise, expand its offerings and deliver greater value to its clients and stakeholders, the company said.

“This is a significant step forward for Circle and the future of financial infrastructure and dollar digital currencies in the region,” said Dante Disparte, Circle’s Chief Strategy Officer and Head of Global Policy. “The receipt of the MPI license represents our continued commitment to work with forward-thinking leaders and stakeholders at a global level and contribution to Singapore’s position as a hub for responsible financial services innovation.”

Circle Singapore received in-principle approval for the license from MAS in November 2022.

On March 21, after the collapse of Silicon Valley Bank (SVB) briefly led to the de-pegging of USDC from the U.S. dollar, Circle announced their intention to expand operations to France and applied to become a licensed Electronic Money Institution and a registered Digital Asset Service Provider (DASP) under the country’s strict financial regulations.

If Circle succeeds in gaining approval from the Autorité des Marchés Financiers (AMF), it would become the first company to receive full authorization under the DASP regulations.

The move is part of Circle’s ongoing effort to expand its operations in Europe, which began with the launch of Euro Coin (EUROC). Circle is now looking to establish France as its home base of European operations, and a registration with the AMF will enable the firm to offer a suite of products and services to customers in the region while remaining in full compliance with local regulations.

On March 29, Circle announced that they would like their cash reserves to be held with the Federal Reserve.

Circle held roughly $3.3 billion worth of the cash reserves that backed USDC at SVB, and temporarily lost access to the funds when the bank collapsed. Before the U.S. government ultimately stepped in to backstop all deposits at the bank, the crypto ecosystem had to deal with several days of uncertainty which saw USDC fall to a low of $0.82 on some exchanges.

“We have always aspired to hold the cash portion of the USDC reserve directly with the Federal Reserve, fulfilling our vision of USDC as true tokenized cash,” wrote Jeremy Fox-Green, Chief Financial Officer at Circle.

But on May 11, Circle CEO Jeremy Allaire told Zachary Warmbrodt, author of Politico’s Morning Money newsletter, that the company no longer held any Treasuries that matured beyond early June due to worries over the debt ceiling crisis.

“We don’t want to carry exposure through a potential breach of the ability of the U.S. government to pay its debts,” Allaire said at the time.

Circle’s USDC currently has a total market cap of $28.5 billion, second behind Tether’s USDT at $83.3 billion.

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