The Singapore Monetary Authority (MAS) has completed its work to draft new legislation governing stablecoins. This framework, released on Tuesday afternoon Asia time, is intended to guarantee that stablecoins operating under Singapore’s regulatory control place a significant focus on value stability.
Integration of Public Consultation and Feedback
Following the commencement of a public consultation in October of the previous year, MAS integrated significant comments into the formulation of these new guidelines. As a consequence, a thorough and well-informed set of criteria to regulate stablecoin activities has been developed.
Key Requirements for Issuers
MAS has outlined a series of essential requirements that potential stablecoin issuers must adhere to:
- Maintenance of Suitable Reserve Assets: Issuers must ensure the presence of appropriate reserve assets to maintain stability within their stablecoin system.
- Minimum Capital Base and Liquid Assets: Stablecoin issuers are obligated to maintain a minimum capital base and readily accessible liquid assets to support their operations.
- Prompt Redemption Capability: Issuers must possess the capacity to promptly redeem stablecoins at their par value within five business days of a redemption request.
- Disclosure Obligations: Transparency is vital, with issuers being required to meet specific disclosure requirements.
Deputy Managing Director’s Perspective
Ms. Ho Hern Shin, Deputy Managing Director (Financial Supervision) at MAS, emphasized the significance of this stablecoin regulatory framework in promoting stablecoins as a credible digital medium of exchange. The framework also aims to act as a bridge between traditional fiat currencies and the evolving digital asset ecosystem. Ms. Ho encouraged stablecoin issuers aiming for recognition as ‘MAS regulated stablecoins’ to proactively prepare for compliance, reflecting the regulator’s commitment to fostering a responsible and regulated stablecoin environment.
