The Monetary Authority of Singapore (MAS) announced the features of a new regulatory framework governing stablecoins and their issuers in the country. This takes into account the feedback received for an October 2022 public consultation on proposed stablecoin regulation. As part of the announcement, it also published its responses to the initial consultation that details the MAS’s rationale for the new rules.
According to the regulator, stablecoins are designed to maintain a fixed value vis-a-vis fiat currencies and when well-regulated to preserve such value stability, they can serve as a trusted medium of exchange for the cryptoasset ecosystem. Therefore, its stablecoin regulatory framework will apply to single-currency stablecoins (SCS) issued in Singapore that are pegged to the Singapore Dollar or any G10 currency, as these currencies have high-quality liquid assets available to back the SCS.
Not all stablecoin issuers will be able to fulfil these requirements and only those that can will be able to apply to the MAS for their stablecoins to be recognized and labelled as “MAS-regulated stablecoins”. This enables users to easily identify MAS-regulated stablecoins from other cryptoassets and conduct proper risk assessment when choosing to deal in unregulated stablecoins, which may not afford them the same protection of value stability as MAS-regulated ones.