MAS Finalises Stablecoin Regulatory Framework
Singapore, 15 August 2023... The Monetary Authority of Singapore (MAS) today announced the features of a new regulatory framework that seeks to ensure a high degree of value stability for stablecoins regulated in Singapore. The regulatory framework takes into account feedback received, following an October 2022 public consultation.
2 Stablecoins are digital payment tokens designed to maintain a constant value against one or more specified fiat currencies. When well-regulated to preserve such value stability, stablecoins can serve as a trusted medium of exchange to support innovation, including the “on-chain” purchase and sale of digital assets.
3 MAS’ stablecoin regulatory framework will apply to single-currency stablecoins (SCS) pegged to the Singapore Dollar or any G10 currency, that are issued in Singapore. Issuers of such SCS will have to fulfil key requirements relating to:
- Value stability: SCS reserve assets will be subject to requirements relating to their composition, valuation, custody and audit, to give a high degree of assurance of value stability.
- Capital: Issuers must maintain minimum base capital and liquid assets to reduce the risk of insolvency and enable an orderly wind-down of business if necessary.
- Redemption at Par: Issuers must return the par value of SCS to holders within five business days from a redemption request.
- Disclosure: Issuers must provide appropriate disclosures to users, including information on the SCS’ value stabilising mechanism, rights of SCS holders, as well as the audit results of reserve assets.
4 Only stablecoin issuers that fulfil all requirements under the framework can apply to MAS for their stablecoins to be recognised and labelled as “MAS-regulated stablecoins”. This label will enable users to readily distinguish MAS-regulated stablecoins from other digital payment tokens, including “stablecoins” which are not subject to MAS’ stablecoin regulatory framework. Any person that misrepresents a token as an “MAS-regulated stablecoin”, may be subject to penalties
5 Ms Ho Hern Shin, Deputy Managing Director (Financial Supervision), MAS, said, “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.”
6 For further details on the finalised stablecoin regulatory framework as well as the response to the public consultation, please refer to MAS website .
***
Related News
-
Letters to EditorPublished Date: 04 September 2023
Response to Letter “Singapore treads uneasily in crypto sandbox” - Financial Times, 22 August 2023
In response to a forum letter on the cryptocurrency landscape in Singapore, MAS said that it is progressively putting in place measures to mitigate the risks posed by cryptocurrencies to retail customers. As these measures are implemented, Singapore will soon be home to one of the strictest regulatory regimes in the world governing retail access to cryptocurrencies.
-
Media ReleasesPublished Date: 25 August 2023
Regional Payment Connectivity Expansion to Include State Bank of Vietnam
State Bank of Vietnam, the central bank of Viet Nam, has officially joined the Regional Payment Connectivity (RPC) initiative. This recent development is an expansion of the Memorandum of Understanding on Cooperation in Regional Payment Connectivity (MOU RPC) that was initiated by the central banks of Indonesia, Malaysia, Philippines, Singapore, and Thailand at the sidelines of the G20 Leaders’ Summit.
-
Letters to EditorPublished Date: 21 August 2023
Response to two letters on elimination of cheques – The Straits Times, 11 and 15 August 2023
In response to two forum letters raising concerns regarding banks charging a fee to process cheques, MAS explained that cheque clearing is an increasingly inefficient use of industry capital and resources. Charging for cheque usage more accurately reflects processing costs. Cheque users have the option of transitioning to cheaper and more efficient means of fund transfers.