Blockchain fintech company Paxos has announced partnering 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 by Mercado Libre.
The latest move is part of Paxos’ vision to position itself as an “established leader” in digital assets throughout the region. Data cited by the company stated that over 60% of its active wallets currently support customers in Latin America.
Paxos’s Presence in Latin America
According to the official press release, Paxos said that the adoption of USDP by Mercado Pago in Mexico further builds on the established partnership between the fintech firms, as Mexican users will now be able to access the regulated stablecoin via Mercado Pago.
In a statement, Arnoldo Reyes, Head of Latin America of Paxos, highlighted the increasing demand for “transformational technology” by digital asset consumers in the region. He added,
“Mexico is one of the most active marketplaces for digital assets with millions of users tapping into the ecosystem to gain access to key financial services. The launch of USDP within Mercado Pago represents another way that Mercado Libre continues 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 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.
Furthermore, the company website states that Withum’s examination is carried out in accordance with attestation standards set up by the American Institute of Certified Public Accountants (AICPA).
Push For Stablecoin Regulations
The stablecoin market has grown significantly over the past decade. Despite much new proliferation, the ecosystem has not managed to steer away from backlash and FUD. In fact, Paxos’s development comes amidst growing calls for stablecoin-related regulations across the world, especially after TerraUSD’s (UST) collapse and the subsequent FTX implosion.
Italy’s top banking authority, for one, released a new report titled “Markets, Infrastructures and Payment Systems,” calling on regulators to implement the same financial conduct standards for stablecoin issuers in the industry. It said that regulating stablecoins is crucial because of its close ties with the DeFi market.
Hong Kong Monetary Authority (HKMA) aims to roll out a regulatory framework for stablecoins by the end of 2024 and is currently in the process of seeking public views regarding the ecosystem.