On August 15, the Monetary Authority of Singapore (MAS) issued a document on its official website stating that it had finalized the regulatory framework for stablecoins. The regulatory framework takes into account feedback received following a public consultation in October 2022.
MAS said that when well regulated to maintain value stability, stablecoins can serve as a trusted medium of exchange to support innovation, including the "on-chain" purchase and sale of digital assets.
MAS’s stablecoin regulatory framework will apply to single currency stablecoins (SCS) pegged to the Singapore dollar or any G10 currency. Issuers of such SCS must meet key requirements regarding:
a. Value stability: SCS reserve assets will be subject to requirements on their composition, valuation, custody and auditing to ensure a high degree of value stability;
b. Capital: The issuer must maintain minimum basic capital and liquid assets to reduce the risk of bankruptcy and wind down the business in an orderly manner if necessary;
c. Redemption at face value: The issuer must return the face value funds of SCS to the holder within five working days after the redemption request;
d. Disclosure: Issuers must provide appropriate disclosures to users, including information about the SCS value stabilization mechanism, the rights of SCS holders, and the audit results of reserve assets.
Only stablecoin issuers that meet all requirements under this framework can apply to MAS for their stablecoins to be recognized and labeled as "MAS-regulated stablecoins." The label will allow users to easily distinguish MAS-regulated stablecoins from other digital payment tokens.
Anyone who misrepresents a token as a "MAS-regulated stablecoin" may be punished under MAS's stablecoin regulatory framework and placed on MAS's investor alert list. If users choose to trade stablecoins that are not regulated by the MAS framework, they should make an informed decision about the attendant risks.
Ms Ho Hern Shin, Deputy Managing Director (Financial Regulation) of MAS, said MAS’s stablecoin regulatory framework aims to promote the use of stablecoins as trusted digital media of exchange and serve as a bridge between fiat currencies and digital asset ecosystems. We encourage and hope that SCS issuers whose stablecoins are recognized as "MAS-regulated stablecoins" will prepare for compliance as soon as possible.
Further details on the finalized regulatory framework for stablecoins and the response to the public consultation are available on the MAS website.
Click "Read Full Text" at the bottom to enter the MAS website. Reference is made to the Consultation Paper on the Proposed Supervision Approach to Stablecoin-Related Activities, which sets out the HKMA’s policy approach to the overall regulatory approach to stablecoin-related issuance and intermediary activities and highlights key requirements for such activities. The HKMA invites interested parties to provide comments on the proposals set out in the consultation paper.
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