Singapore Releases Revised Regulatory Framework For Stablecoins

Singapore’s central bank has announced the release of a revised regulatory framework to ensure stability for single-currency stablecoins regulated in the city-state.

The framework outlines requirements that issuers need to meet to be deemed as regulated by the monetary authority of Singapore.

Better Regulatory Clarity

The revised framework was announced on the 15th of August and is primarily aimed at non-bank issued stablecoins that are pegged to the value of the Singapore Dollar, or G10 currencies, including the British Pound, Euro, and the United States Dollar, and whose circulation is greater than 5 million Singapore Dollars. The Monetary Authority of Singapore stated,

“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. MAS’ stablecoin regulatory framework will apply to single-currency stablecoins (SCS) pegged to the Singapore Dollar or any G10 currency that is issued in Singapore.”

According to the Singapore central bank’s financial supervision deputy managing director, Ho Hern Shin, the framework helps to establish and facilitate stablecoin use as a credible digital medium of exchange and a bridge between the traditional and digital currency ecosystems. Shin also urged stablecoin issuers to prepare for compliance if they wished for their stablecoin to be labeled as regulated by the Monetary Authority of Singapore.

Details Of The Framework

The revised regulatory framework lists several requirements for stablecoin issuers. These include redemption timelines, reserve management, disclosures, and capital requirements. According to the MAS, reserve assets will be subject to requirements depending on their valuation, composition, custody, and audit. Stablecoin issuers will also have to maintain a minimum base capital and liquid assets to stave off any risk of insolvency. Stablecoin issuers will also be required to return the par

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Author: Amara Khatri

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