The Monetary Authority of Singapore (“MAS”) has announced the finalised features of a new stablecoin regulatory framework.
The new regulatory framework will seek to ensure a high degree of value stability for stablecoins regulated in Singapore. It will apply to single-currency stablecoins (“SCS”) fixed to the Singapore Dollar or any G10 currency, that are issued in Singapore.
Issuers of such SCS will be required to fulfil key requirements relating to:
- Value stability: SCS reserve assets will be subject to requirements relating to their composition, valuation, custody, and audit, to give a high degree of assurance of value stability.
- Capital: Issuers must maintain minimum base capital and liquid assets to reduce the risk of insolvency and enable an orderly wind-down of business if necessary.
- Redemption at Par: Issuers must return the par value of SCS to holders within five business days from a redemption request.
- Disclosure: Issuers must provide appropriate disclosures to users, including information on the SCS’ value stabilising mechanism, rights of SCS holders, as well as the audit results of reserve assets.
Firms can view the guidance published by MAS for further information on the forthcoming regulatory framework and how it may affect their operations.