Blockchain fintech company Paxos has announced a partnership with online marketplace Mercado Libre to bring the Pax Dollar (USDP) stablecoin to users in Mexico. Transactions will be facilitated by MercadoPago, which happens to be a digital wallet app from Mercado Libre.
The latest move is part of Paxos’ vision to position itself as an “established leader” in digital assets across the region. Data cited by the company indicates that more than 60% of its active portfolios currently support clients in Latin America.
Presence of Paxos in Latin America
According to the official Press releasePaxos said Mercado Pago’s adoption of USDP in Mexico further leverages the partnership established between fintech firms, as Mexican users will now be able to access the regulated stablecoin through Mercado Pago.
In a statement, Arnoldo Reyes, head of Latin America for Paxos, highlighted the growing demand for “transformational technologies” by consumers of digital assets in the region. He added,
“Mexico is one of the most active markets for digital assets, with millions of users leveraging the ecosystem to access key financial services. The launch of USDP within Mercado Pago represents another way for Mercado Libre to continue to democratize access to commerce and financial services through innovative digital asset solutions throughout Latin America.
The Paxos-issued stablecoin, USDP, is subject to strict regulatory oversight by the New York State Department of Financial Services. USDP’s reserves are held in cash and cash equivalents, while its attestation reports are issued by WithumSmith + Brown, PC, which happens to be an independent third-party accounting firm.
Additionally, the company’s website states that Withum’s exam is conducted according to attestation standards established by the American Institute of Certified Public Accountants (AICPA).
Regulation Push For Stablecoin
The stablecoin market has grown significantly over the past decade. Despite further proliferation, the ecosystem has failed to avoid backlash and FUD. In fact, the development of Paxos comes amid growing calls for stablecoin-related regulations across the globe, especially after the collapse of TerraUSD (UST) and the ensuing implosion of FTX.
The highest Italian banking authority, for its part, released a new report titled “Payments Markets, Infrastructure and Systems,” calling on regulators to implement the same standards of financial conduct for stablecoin issuers in the industry. He said the regulation of stablecoins is crucial due to its close ties to the DeFi market.
Hong Kong Monetary Authority (HKMA) goals to roll out a regulatory framework for stablecoins by the end of 2024 and is currently in the process of soliciting public input regarding the ecosystem.
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