Singapore central bank releases regulatory framework for stablecoins

Singapore’s central financial institution has launched a revised regulatory framework aimed toward guaranteeing stability for single-currency stablecoins regulated within the city-state.

The Financial Authority of Singapore announced the framework on Aug. 15 and mentioned it is going to police single-currency stablecoins (SCS) pegged to the worth of the Singapore greenback or G10 currencies such because the euro, British pound and United States greenback.

“MAS’ stablecoin regulatory framework goals to facilitate the usage of stablecoins as a reputable digital medium of change, and as a bridge between the fiat and digital asset ecosystems,” mentioned the financial institution’s deputy managing director of economic supervision Ho Hern Shin.

“We encourage SCS issuers who would love their stablecoins acknowledged as ‘MAS regulated stablecoins’ to make early preparations for compliance,” Shin added.

The framework outlines a number of necessities that stablecoin issuers must adhere to, together with well timed redemptions and sturdy reserve administration, amongst others: 

• Worth stability: Reserve belongings shall be topic to necessities regarding their composition, valuation, custody and audit, to present a excessive diploma of assurance of worth stability.
• Capital: Stablecoin issuers should preserve minimal base capital and liquid belongings to cut back the chance of insolvency and allow an orderly wind-down of enterprise if obligatory.
• Redemption at Par: Issuers should return the par worth of the stablecoins to holders inside 5 enterprise days from a redemption request.
• Disclosure: Issuers should present acceptable disclosures to customers, together with data on the SCS’ worth stabilizing mechanism, rights of SCS holders, in addition to the audit outcomes of reserve belongings.

MAS famous solely stablecoin issuers that fulfill the necessities beneath the framework will be capable to apply to change into MAS-regulated.

“This label will allow customers to readily distinguish MAS-regulated stablecoins from different digital cost tokens, together with ‘stablecoins’ which aren’t topic to MAS’ stablecoin regulatory framework,” it mentioned.

It additionally warns any person who represents a token as being MAS-ceritified can be topic to penalties set out within the new framework, together with being added to an alert listing. 

The revised regulatory framework accounts for suggestions from an October 2022 public session.

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It is a growing story, and additional data shall be added because it turns into accessible.