Singapore’s central bank has released a revised regulatory framework aimed at ensuring the stability of the single currency stablecoin (SCS) regulated by the city-state.
Monetary Authority of Singapore Announce Published on Aug. 15, the framework targets non-bank-issued stablecoins pegged to the value of the Singapore dollar or G10 currencies such as the euro, British pound and U.S. dollar with a circulation of more than S$5 million ($3.7 million).
Ho Hern Shin, the bank’s deputy general manager of financial supervision, said the framework aims to promote the use of stablecoins “as trusted digital mediums of exchange and bridges between fiat currencies and digital asset ecosystems.”
@MAS_sg Features of the new regulatory framework announced, aimed at ensuring a high degree of value stability #stablecoin supervised by #Singapore. pic.twitter.com/LBUoOGY16P
— MAS (@MAS_sg) August 15, 2023
Shin encouraged stablecoin issuers to prepare for compliance if they want their stablecoins to be labeled as regulated by the MAS.
The framework outlines a number of MAS requirements for stablecoin issuers, including redemption schedules, disclosures, reserve management and capital requirements:
- Value stability: The composition, valuation, custody, and audit of reserve assets all meet the requirements, and the value stability is highly guaranteed.
- Capital: Stablecoin issuers must maintain a minimum base capital and liquid assets to reduce the risk of insolvency and, if necessary, to wind down the business in an orderly manner.
- Redemption at face value: The issuer must return the face value of the stablecoin to the holder within five business days of a redemption request.
- Disclosure: Issuers must provide users with appropriate disclosures, including information about SCS value stabilization mechanisms, SCS holders’ rights, and audit results of reserve assets.
MAS noted that only stablecoin issuers that meet the requirements of the new framework can apply to be regulated by MAS — a label the central bank says ensures users can distinguish them from unregulated stablecoins.
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It warned that those who obtain MAS certification on behalf of tokens will be subject to the penalties set out in the new framework, which include fines and imprisonment, and be added to an alert list.
The revised regulatory framework takes into account feedback from the October 2022 public consultation. MAS needs to hold consultations and Parliament must pass amendments to implement the framework.
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