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Blockchain fintech firm Paxos has revealed its collaboration with online marketplace Mercado Libre to introduce the Pax Dollar (USDP) stablecoin to users in Mexico. Transactions will be enabled through MercadoPago, which is a digital wallet application developed by Mercado Libre.
This recent initiative aligns with Paxos’ objective to establish itself as a “recognized leader” in digital assets across the region. Data referenced by the company indicated that more than 60% of its active wallets currently cater to customers in Latin America.
Paxos’s Footprint in Latin America
As per the official press release, Paxos stated that the integration of USDP by Mercado Pago in Mexico further strengthens the existing partnership between the fintech companies, allowing Mexican users to access the regulated stablecoin through Mercado Pago.
In a statement, Arnoldo Reyes, Head of Latin America at Paxos, emphasized the rising demand for “transformational technology” among digital asset users in the region. He remarked,
“Mexico is one of the most active marketplaces for digital assets with millions of users engaging with the ecosystem to access essential financial services. The introduction of USDP within Mercado Pago signifies another method by which Mercado Libre continues to democratize access to commerce and financial services through innovative digital asset solutions across Latin America.”
The stablecoin issued by Paxos, USDP, is under stringent regulatory supervision by the New York State Department of Financial Services. USDP reserves are maintained in cash and cash equivalents, while its attestation reports are provided by WithumSmith+Brown, PC, an independent third-party accounting firm.
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Moreover, the company’s website mentions that Withum’s examination is conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants (AICPA).
Advocacy for Stablecoin Regulations
The stablecoin sector has experienced substantial growth over the last decade. Despite this expansion, the ecosystem has faced criticism and skepticism. In fact, Paxos’s advancement occurs amid increasing demands for stablecoin-related regulations globally, particularly following the collapse of TerraUSD (UST) and the subsequent downfall of FTX.
Italy’s leading banking authority, for instance, published a new report titled “Markets, Infrastructures and Payment Systems,” urging regulators to apply the same financial conduct standards to stablecoin issuers within the industry. It asserted that regulating stablecoins is vital due to their close relationship with the DeFi market.
The Hong Kong Monetary Authority (HKMA) intends to implement a regulatory framework for stablecoins by the end of 2024 and is currently seeking public input regarding the ecosystem.
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