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.

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.

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