Global: MAS Establishes Comprehensive Regulatory Framework for Stablecoins

Singapore plans joint crypto pilots with Japan, Switzerland and UK
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The Monetary Authority of Singapore (MAS) has finalized a comprehensive regulatory framework for stablecoins after taking into consideration feedback received during a public consultation. This framework will be applicable to single-currency stablecoins (SCS) pegged to the Singapore dollar or any of the G10 currencies issued in Singapore.

Stablecoins, as described by MAS, are digital payment tokens designed to maintain a consistent value against one or more specified fiat currencies. When properly regulated to uphold this value stability, stablecoins can function as a reliable medium of exchange to support innovations, including on-chain transactions involving digital assets.

In order to be recognized and designated as “MAS-regulated stablecoins,” issuers of SCS in Singapore must fulfill specific requirements outlined in the framework. These include maintaining SCS reserve assets that provide a high degree of assurance of value stability, upholding minimum base capital and liquid assets to mitigate the risk of insolvency and ensure an orderly wind-down if needed, offering SCS redemption at par value to holders within five business days, and delivering appropriate information and disclosures to users.

MAS underscores that anyone who falsely represents a token as an “MAS-regulated stablecoin” could face penalties, which may involve financial fines or imprisonment. Such individuals may also be included in MAS’ Investor Alert List.

Ho Hern Shin, Deputy Managing Director (Financial Supervision) at MAS, emphasizes that the stablecoin regulatory framework aims to facilitate the use of stablecoins as a trustworthy digital medium of exchange, acting as a link between fiat and digital asset ecosystems. He encourages SCS issuers seeking recognition of their stablecoins as “MAS-regulated stablecoins” to start preparing for compliance ahead of time.

This development closely follows PayPal’s recent launch of its US dollar stablecoin, PayPal USD, following a period of regulatory scrutiny that temporarily halted the offering’s development in February.

Internationally, the Republic of Palau, a Pacific island nation, partnered with Ripple to initiate a limited stablecoin pilot on July 31.

In July, the Financial Stability Board (FSB), an international entity overseeing the global financial sector, also introduced its regulatory framework for cryptoasset activities.

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