MAS releases stablecoin regulatory framework 16 August 2023Singapore Reporter: Lucy Carter
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The Monetary Authority of Singapore (MAS) has established a regulatory framework for stablecoins.
The framework follows feedback from MAS’ October 2022 public consultation on the topic, and aims to ensure a high degree of value stability for stablecoins regulated in Singapore. It applies to single-currency stablecoins (SCS) issued in Singapore and pegged to the Singapore Dollar or any G10 currency.
Stablecoin issuers must meet certain requirements in order to apply to be recognised by MAS and considered ‘MAS-regulated stablecoins’. These requirements include the provision of appropriate disclosures to users, the maintenance of minimum base capital and liquid assets and redemption at par, by which the par value of SCS must be returned to holders within five business days of a redemption request.
Additionally, SCS reserve assets must align with requirements on composition, valuation, custody and audit in order to provide assurance of value stability.
Ho Hern Shin, deputy managing director for financial supervision at MAS, says: “MAS’ stablecoin regulatory framework aims to facilitate the use of stablecoins as a credible digital medium of exchange, and as a bridge between the fiat and digital asset ecosystems. We encourage SCS issuers who would like their stablecoins recognised as ‘MAS regulated stablecoins’ to make early preparations for compliance.”
Penny Chai, vice president of business development for APAC at verification platform Sumsub, comments: "Singapore's aim to establish comprehensive regulations for stablecoins is a significant step towards fostering a secure and transparent digital currency environment. The move sets a noteworthy example for other jurisdictions. Stablecoins have surpassed US $100 billion in market value, according to recent reports, therefore the need for regulatory clarity is paramount as the market continues to grow.”
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