Paxos acquires Membrane Finance for EU stablecoin expansion

Blockchain infrastructure platform Paxos has agreed to buy Membrane Finance, the Finnish Electronic Money Institution. Upon regulatory approval, the acquisition will give Paxos entry into the European Union.

A stablecoin issuer with a desirable license

The acquisition of Membrane Finance will make Paxos a fully licensed EMI in Finland and the EU thanks to Membrane Finance’s Finnish Financial Supervisory Authority license. That license is recognized in 30 European countries. Paxos head of strategy Walter Hessert said in a statement:

“Stablecoins are becoming increasingly more prevalent throughout the market as more use cases emerge for everyday users. […] With Membrane, we expect to extend our reach to EU customers looking to benefit from stablecoins.” 

Membrane Finance is the issuer of the EUROe and eUSD stablecoins. It launched the EUROe in February 2023, which did not see a large immediate demand. Stasis, Circle, Tether and Celo are also issuers of euro-pegged stablecoins.

There are other tokens that share the eUSD designation. Membrane Finance’s eUSD is among the less active of them.

Related: Tether, Kraken, Fabric Ventures back new MiCA-compliant stablecoins

Paxos had dollar-pegged and gold tokens, but no euro coin

Paxos is the issuer of the Pax Dollar (USDP) under the regulation of the New York State Department of Financial Services. In addition, Paxos International introduced the yield-bearing Lift Dollar (USDL) stablecoin under Abu Dhabi Global Market regulation in June. Paxos Singapore began issuing the Global Dollar (USDG) in conjunction with DBS Bank with Singapore Monetary Authority approval on Nov. 1.

Also in November, a consortium of crypto and traditional finance companies, including Robinhood, Galaxy Digital, Kraken and Paxos, was formed to “accelerate and reward global stablecoin adoption.” It has USDG specifically in mind.

Paxos also issues a cryptocurrency (PAXG) backed by gold it holds in reserve.

The European stablecoin market is regulated under the Markets in Crypto-Assets (MiCA) Regulation. Its stablecoin provisions came into force on July 1. One day before Paxos announced its Membrane Finance acquisition, MiCA-compliant US dollar- (USDQ) and euro-pegged (EURQ) stablecoins were issued by Dutch fintech Quantoz with the backing of Tether, Kraken and Fabric Ventures and approval of the Dutch central bank.

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