The Monetary Authority of Singapore (MAS) has unveiled the features of a new regulatory framework aimed at ensuring a high degree of stability for stablecoins in the country. This is the outcome of the central bank’s public consultation, which commenced in October 2022.
Feedback from this public consultation was considered during the design of this new set of stablecoin rules in Singapore. According to MAS, these rules will apply to single-currency stablecoins (SCS) pegged to the Singapore dollar or any G10 currency – including the US dollar.
MAS Releases “Key Requirements” For Stablecoin Issuers In Singapore
In a media release published on Tuesday, August 15, the Monetary Authority of Singapore outlined key requirements for issuers of single-currency stablecoins in the country. The new regulatory framework for stablecoins consists of various provisions relating to value stability, base capital, redemption timeframes, and disclosure.
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The central bank stated that reserve assets – of a stablecoin – will be subject to requirements relating to their composition, valuation, custody, and audit, to give a high level of assurance on value stability.
Meanwhile, issuers are required to maintain minimum base capital and liquid assets to lower the risk of bankruptcy. This is to also facilitate an “orderly wind-down” of business – if the need arises.
Additionally, SCS issuers in Singapore must refund the equivalent value of the stablecoins to holders within five business days after a redemption request is submitted.
Finally, the Monetary Authority of Singapore has mandated all stablecoin companies to provide appropriate disclosures to their users. Some of the information they are expected to disclose to their customers include SCS’ value stabilizing mechanism, the rights of SCS holders, and the audit results of reserve assets.
The MAS noted that only issuers that fulfill all requirements under this new regulatory framework can apply for their stablecoins to be recognized as “MAS-regulated stablecoins.”
However, the financial regulator also warned issuers against misrepresenting their tokens as MAS-regulated stablecoins, as it may result in penalties under the revised stablecoin regulatory framework.
MAS’ Stablecoin Regulatory Framework – A Positive Sign For Global Adoption?
In the press release, the…
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