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News

Singapore Unveils Groundbreaking Rules For Regulated Stablecoins

August 15, 2023 - Around 2 mins mins to read

Key Points:

  • The Monetary Authority of Singapore launches a framework for stablecoins, prioritizing value stability.
  • Guidelines cover single-currency stablecoins, ensuring stability, capital, and transparency.
  • MAS-regulated stablecoin designation promotes trust, caution is advised for non-regulated options.
The Monetary Authority of Singapore (MAS) has unveiled a comprehensive regulatory framework for stablecoins aimed at ensuring robust value stability for regulated stablecoins within the country.
Singapore Unveils Groundbreaking Rules For Regulated Stablecoins
Singapore Unveils Groundbreaking Rules For Regulated Stablecoins 2

The framework, informed by a public consultation initiated in October of the previous year, incorporates feedback to enhance its design.

MAS’ regulatory scope will encompass single-currency stablecoins (SCS) linked to the Singapore Dollar or any G10 currency issued within Singapore. Issuers of such stablecoins must meet key requirements, including:

  • Value Stability: SCS reserve assets will be subject to stringent criteria regarding composition, valuation, custody, and auditing to ensure high-value stability and confidence.
  • Capital Reserves: Issuers must maintain minimum base capital and liquid assets to mitigate insolvency risks and facilitate an orderly wind-down.
  • Redemption at Par: Issuers must promptly return the par value to holders within five business days of a redemption request.
  • Transparency: Issuers must provide comprehensive user disclosures covering the value-stabilizing mechanism, SCS holder rights, and audit outcomes for reserve assets.

Only stablecoin issuers meeting all framework requirements can seek MAS recognition for their stablecoins as “MAS-regulated stablecoins.” This labeling helps users differentiate between MAS-regulated stablecoins and other digital payment tokens outside MAS’ regulatory framework.

Misrepresentation of a token as a “MAS-regulated stablecoin” can lead to penalties and inclusion on MAS’ Investor Alert List. Users are advised to assess risks when dealing with stablecoins beyond MAS’ framework.

Previously, the MAS issued a paper suggesting a framework for open and interoperable networks for digital assets.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

MAS

regularly

SCS

singapore

Stablecoin

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Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.
News

Singapore Unveils Groundbreaking Rules For Regulated Stablecoins

Key Points:

  • The Monetary Authority of Singapore launches a framework for stablecoins, prioritizing value stability.
  • Guidelines cover single-currency stablecoins, ensuring stability, capital, and transparency.
  • MAS-regulated stablecoin designation promotes trust, caution is advised for non-regulated options.
The Monetary Authority of Singapore (MAS) has unveiled a comprehensive regulatory framework for stablecoins aimed at ensuring robust value stability for regulated stablecoins within the country.
Singapore Unveils Groundbreaking Rules For Regulated Stablecoins
Singapore Unveils Groundbreaking Rules For Regulated Stablecoins 4

The framework, informed by a public consultation initiated in October of the previous year, incorporates feedback to enhance its design.

MAS’ regulatory scope will encompass single-currency stablecoins (SCS) linked to the Singapore Dollar or any G10 currency issued within Singapore. Issuers of such stablecoins must meet key requirements, including:

  • Value Stability: SCS reserve assets will be subject to stringent criteria regarding composition, valuation, custody, and auditing to ensure high-value stability and confidence.
  • Capital Reserves: Issuers must maintain minimum base capital and liquid assets to mitigate insolvency risks and facilitate an orderly wind-down.
  • Redemption at Par: Issuers must promptly return the par value to holders within five business days of a redemption request.
  • Transparency: Issuers must provide comprehensive user disclosures covering the value-stabilizing mechanism, SCS holder rights, and audit outcomes for reserve assets.

Only stablecoin issuers meeting all framework requirements can seek MAS recognition for their stablecoins as “MAS-regulated stablecoins.” This labeling helps users differentiate between MAS-regulated stablecoins and other digital payment tokens outside MAS’ regulatory framework.

Misrepresentation of a token as a “MAS-regulated stablecoin” can lead to penalties and inclusion on MAS’ Investor Alert List. Users are advised to assess risks when dealing with stablecoins beyond MAS’ framework.

Previously, the MAS issued a paper suggesting a framework for open and interoperable networks for digital assets.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.