Stablecoins that meet all the criteria set by the Singapore central bank will be labeled as MAS-regulated stablecoins.
Following last year’s stablecoin debacle, international leaders stressed the importance of developing global regulations and norms for the industry. Despite such calls, only a few countries have taken concrete steps to implement such measures.
In contrast, Singapore’s central bank has taken a proactive approach, introducing a structured framework outlining various prerequisites aimed at bringing transparency to stablecoin issuers and their operations.
Stablecoin Regulation in Singapore
The Monetary Authority of Singapore (MAS) has announced features of a new regulatory framework to ensure a high degree of value stability for stablecoins regulated by the city-state.
The regulatory framework was developed based on comments received during a public consultation in October 2022, and will be relevant to single-currency stablecoins (SCS) pegged to the Singapore dollar or any other G10 currency issued in Singapore.
Therefore, SCS needs to comply with certain requirements.
Value stability: SCS’s reserve assets will be subject to regulations regarding their composition, valuation, custody, and auditing. These measures are designed to ensure that people have sufficient confidence in maintaining value stability.
Capital: To reduce the risk of insolvency and facilitate an orderly wind-down of operations (if necessary), stablecoin issuers must maintain a minimum base of capital and maintain liquid assets.
· Redemption at par: The issuer must return the par value of the SCS to the holder within five business days of the redemption request.
Disclosure: Issuers need to provide users with necessary disclosures, including detailed information about the SCS value stabilization mechanism, SCS holders’ rights, and the results of the reserve asset audit.
Stablecoins that meet all the criteria will be labeled as MAS-regulated stablecoins, distinguishing them from those that lack regulation.
With the latest move, Singapore becomes one of the first jurisdictions in the world to take regulatory measures on stablecoins. Commenting on the development, Ho Hern Shin, deputy director (financial supervision) at MAS, said,
“MAS’s regulatory framework for stablecoins aims to promote stablecoins as a reliable digital medium of exchange and a bridge between the fiat currency and digital asset ecosystems. We encourage SCS issuers who wish their stablecoins to be recognized as ‘MAS regulated stablecoins’ to prepare for compliance as early as possible.”
Cryptocurrency Progress in Singapore
Singapore is slowly establishing itself as a hub for digital currencies. In this sense, regulators in the region are actively seeking to attract international companies, especially in light of the crypto industry’s criticism of the U.S. regulatory framework.
In the past few months, several crypto platforms including Blockchain.com, Crypto.com, Gemini, Circle, Paxos and Ripple have obtained authorization in Singapore. #新加坡 #稳定币
