Singapore’s Central Bank Releases Regulatory Framework for Stablecoins

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Sujha Sundararajan

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August 15, 2023

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The Monetary Authority of Singapore (MAS), the city-state’s de-facto central bank, announced its revised regulatory framework for stablecoins, aimed to “ensure a high degree of value stability for stablecoins regulated in Singapore.”

Released Tuesday, the new rules will apply to any single-currency stablecoins (SCS) pegged to the Singapore dollar or any G10 currencies, that are issued in Singapore including the euro, United States dollar and British pound, the central bank announcement noted.

Stablecoins are digital payment tokens (DPT) pegged to legal tender like national currencies and maintain a constant value, unlike other volatile cryptos like Bitcoin (BTC) or Ether (ETH).

The new stablecoin regulatory outline accounts for feedback from an October 2022 public consultation on the overall regulatory approach for stablecoin-related issuance and intermediation activities.

“MAS has carefully considered the feedback received and has incorporated them where appropriate,” a separate response to stablecoin consultation document said. “This paper represents MAS’ finalized regulatory approach towards stablecoins in Singapore.”

Furthermore, the central bank noted that only stablecoin issuers who fulfill all requirements under the framework such as value stability, and maintaining minimum base capital, can apply to MAS to receive a label called – “MAS-regulated stablecoins”.

Ho Hern Shin, Deputy Managing Director at MAS said that SCS issuers who wish their stablecoins to be recognized by the central bank should make early preparations for compliance.

“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.”

However, non-SCS issuers will continue to be subject to the existing DPT regulatory regime, the bank wrote.

Scope of MAS’s Stablecoin Regulatory Framework

Per the response to the consultation paper document, several responders suggested that MAS expand the scope of stablecoins regulated under the SCS framework going forward, taking into account developments in the stablecoin landscape as well as any changes in the risks posed by stablecoins.

While some more responders said that the framework was “restrictive as it did not include other prominent currencies.”

“The restriction to SGD and G10 currencies within the SCS framework takes into consideration the availability of high-quality liquid assets in those currencies that would be fundamental to providing a strong reserve backing for SCS,” the bank clarified.