Singapore’s central bank has announced its revised regulatory framework, whose primary objective is ensuring the stability of single-currency stablecoins that fall under the jurisdiction of the city-state.
Unveiled on August 15th by the Monetary Authority of Singapore, this framework is designed to oversee single-currency stablecoins (SCS) linked to the valuation of either the Singapore dollar or prominent G10 currencies, including the USD, euro and British pound.
Singapore introduces a stablecoin regulatory framework
Ho Hern Shin, the Deputy Managing Director of Financial Supervision at the bank, stated that the regulatory framework introduced by MAS intends to enable the utilization of stablecoins as a trustworthy digital method of transaction, serving as a link between the conventional currency and the digital asset realms. Shin further stated that they urge creators of SCS to take proactive measures to ensure compliance if they intend for their coins to attain the status of MAS-regulated stablecoins.
The framework sets forth a range of stipulations that stablecoin issuers must comply with, encompassing timely redemptions and effective reserve management, among other requirements.
The recent regulatory change follows closely after Circle made public its Singapore subsidiary acquisition of a Major Payment Institution (MPI) license from regulatory authorities. This license allows the company to provide various services, including digital payment token services and cross-border and domestic money transfer services.
Registration requirements for stablecoins
As per the MAS, stablecoin issuers must satisfy essential prerequisites for acknowledgement within the jurisdiction. These prerequisites encompass ensuring the stability of the asset, maintaining adequate capital, possessing the ability to fulfill redemption requests, and implementing proper disclosure mechanisms.
The MAS reiterated that solely those issuers that satisfy all the outlined prerequisites within the framework are eligible to submit applications for their assets to be acknowledged and designated as “MAS-regulated stablecoins.” Simultaneously, the regulatory authority issued a stern warning, emphasizing that issuers who fail to comply with the regulations but falsely represent their tokens as complying would be subjected to penalties and inclusion in MAS’ Investor Alert List.
