Other types of stablecoins not prohibited in Singapore
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The Monetary Authority of Singapore (MAS) has officially established new regulations for stablecoins, a move aimed at keeping stablecoins operating in the city-state a little more stable.
The framework, which has been under development since October 2022, is under continuous development, designed with input from public consultations.
Key requirements for stablecoin issuers include the maintenance of adequate reserve assets to guarantee stability, a minimum capital base, and liquid asset requirements to reduce the risk of insolvency.
Additionally, the regulator demands issuers to be capable of promptly returning the par value of stablecoins to holders within five business days upon redemption request, as well as compliance with disclosure requirements and the audit results of reserve assets.
As emphasized by MAS, only those issuers that meet all of the above requirements can apply for their stablecoins to be recognized and labeled as “MAS-regulated stablecoins.”
“MAS’ stablecoin regulatory framework aims to facilitate the use of stablecoins as a credible digital medium of exchange, and as a bridge between the fiat and digital asset ecosystems,” Ho Hern Shin, Deputy Managing Director (Financial Supervision) at MAS, said in a statement.
Shin also encouraged SCS issuers who would like to see their stablecoins recognized as MAS regulated “to make early preparations for compliance.”
In its response to public consultation also published today, MAS said that “other types of stablecoins will not be prohibited from being issued, used or circulated within Singapore.”
According to the regulator, “such stablecoins, including SCS issued outside of Singapore or pegged to other currencies or assets, will continue to be subject to the existing DPT [Digital Payment Token] regulatory regime.”
Singapore’s financial watchdog added that it will continue to monitor developments in the stablecoin landscape and may bring other types of tokens into the SCS framework.
MAS didn’t immediately respond to Decrypt’s request for comment.
Last year, U.S.-based stablecoin issuers Paxos and Circle announced they were approved to operate in Singapore.
Paxos received a MAS license to offer digital asset and blockchain products and services under the Payment Services Act 2019, whereas Circle, the issuer of the USDC stablecoin, obtained a Major Payment Institution license that allows the firm to provide cross-border and domestic money transfer services in Singapore via its products such as the Circle account.