The Monetary Authority of Singapore has released the final draft of its regulatory framework for stablecoins. The updated framework, published on August 15, 2023, targets stablecoins pegged to the Singapore dollar or any major G10 currencies such as the Euro, British Pound, and United States Dollar.
Central to the framework are a set of prerequisites that stablecoin issuers must adhere to. These prerequisites encompass various aspects such as redemption timelines, transparent disclosures, effective reserve management, and stipulated capital thresholds.
According to the MAS, these stablecoin regulations emphasize value stability through composition, valuation, custody, and audits of reserve assets. To ensure solvency and orderly closure, stablecoin issuers are mandated to maintain sufficient capital and liquid assets. The framework further necessitates the provision of swift redemption at a par value within five days of request and comprehensive disclosures encompassing value stabilization, holder rights, and audits of reserve assets.
Importantly, only stablecoin issuers fully compliant with the framework’s criteria are eligible to seek MAS approval for their stablecoins. This approval will help distinguish “MAS-regulated stablecoins” from other digital payment tokens that may carry the label of “stablecoins” but do not fall within the purview of MAS’ regulatory framework for stablecoins.
Ho Hern Shin, MAS’s Deputy Managing Director overseeing financial supervision, highlighted the dual nature of the framework. Not only does it aim to establish stablecoins as reliable digital mediums of transaction, but it also acts as a bridge between traditional currencies and the evolving digital asset landscape.
Hern Shin emphasized the preparatory aspect, stating:
“We encourage SCS issuers who would like their stablecoins recognized as “MAS regulated stablecoins” to make early preparations for compliance.”
Meanwhile, the Singapore Red Cross revealed on August 7, 2023, that it has joined forces with Triple-A, the first crypto payment gateway sanctioned by the Monetary Authority of Singapore. This partnership enables the organization to accept donations in cryptocurrencies like Bitcoin, Ether, Tether, and USD Coin. The organization’s website has been updated to facilitate donations using these digital currencies.
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