Singapore Introduces New Rules for Single-Currency Stablecoins

by Aug 15, 2023CryptoNews0 comments

Singapore has updated its regulatory framework for single-currency stablecoins, which are digital tokens that are backed by fiat currencies. The Monetary Authority of Singapore (MAS) announced the new framework on Aug. 15, saying that it aims to facilitate the use of stablecoins as a reliable digital medium of exchange and a bridge between the fiat and digital asset ecosystems

The new framework applies to stablecoins that are pegged to the Singapore dollar or any of the G10 currencies, such as the US dollar, the euro, or the British pound. Stablecoin issuers that want to be recognized as “MAS-regulated stablecoins” will have to meet several requirements, including

  • Value stability: The reserve assets that back the stablecoins must be subject to strict rules on their composition, valuation, custody, and audit, to ensure that the stablecoins can maintain their value.
  • Capital: Stablecoin issuers must have sufficient base capital and liquid assets to reduce the risk of insolvency and enable an orderly wind-down of business if necessary.
  • Redemption at par: Stablecoin issuers must return the full value of the stablecoins to holders within five business days of a redemption request.
  • Disclosure: Stablecoin issuers must provide clear and accurate information to users, such as how the stablecoins are stabilized, what rights the holders have, and what the audit results of the reserve assets are.

MAS warned that anyone who falsely claims that a token is an MAS-regulated stablecoin will face penalties under the new framework and will be added to the alert list. The new framework was developed after taking into account feedback from a public consultation in October 2022https://cointelegraph.com/news/singapore-central-bank-releases-regulatory-framework-for-stablecoins.

See also  Nigeria is planning to approve a law recognizing cryptocurrencies.

The revised regulatory framework is part of Singapore’s efforts to foster innovation and growth in the digital payment sector while ensuring consumer protection and financial stability. Singapore is one of the leading jurisdictions in Asia for cryptocurrency and blockchain development, with a supportive regulatory environment and a vibrant ecosystem of startups, investors, and service providers.

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