The Monetary Authority of Singapore (MAS), the central bank of Singapore, has announced a comprehensive regulatory framework for single currency stablecoins (SCS).
These digital tokens are designed to maintain a constant value and are pegged to traditional fiat currencies such as Singapore dollars and G10 currencies.this regulatory This move aims to strengthen the stability of SCS and make it a more reliable medium of digital exchange.
regulatory requirements
The new regulation applies to non-bank issuers of SCS with more than S$5 million in circulation. Issuers must comply with requirements for stability of value, equity, redemption at par, and disclosure to users.
@MAS_sg has announced features of a new regulatory framework aimed at ensuring a high degree of value stability. #stablecoins regulated by #Singapore. https://t.co/j12QambGIJ pic.twitter.com/LBUoOGY16P
—MAS (@MAS_sg) August 15, 2023
Under this framework, issuers are required to maintain a portfolio of shallow risk reserve assets equal to at least 100% of outstanding SCS in circulation. Also, the minimum basic capital he must exceed S$1 million or half of the annual operating expenses.
In addition, MAS will return the face value of SCS to the holders within 5 business days of the redemption request and provide the issuer with information such as the value stabilization mechanism of SCS, the rights of SCS holders, and the audit results of the reserve assets. provide appropriate disclosures, including
Timely transfer and redemption period
MAS stipulates that in line with existing remittance requirements for domestic remittance services, SCS remittances are considered timely if completed within three business days.
this decision With the use of blockchain technology, we have reached this goal despite feedback that SCS transfers should be completed more quickly. MAS noted that these transfers can occur on various blockchain infrastructures with different service standards.
In addition, MAS has further extended the redemption period for stablecoins, requiring issuers to return the value of MAS-regulated SCS to holders within 5 business days. This approach balances user responsiveness with the issuer’s ability to handle redemptions under stressful conditions.
Benefits and potential impact
Singapore‘s new regulatory framework aims to ensure the stability of the high value of stablecoins, which play an important role in the digital economy. Stablecoins serve as a trusted medium of exchange between traditional fiat currencies and the digital asset ecosystem, facilitating innovation in the digital economy.
Additionally, the MAS regulatory framework distinguishes between MAS-regulated stablecoins and other digital payment tokens. Only issuers that meet all requirements can apply for the “MAS Regulated Stablecoin” label, allowing users to easily identify regulated tokens and enhancing investor protection.
Impact and future outlook
By imposing these requirements, MAS will: stablecoin As a reliable digital exchange medium and brilliantThe line between fiat currency and digital asset ecosystems. Using a stablecoin in Singapore can improve the efficiency of cross-border transactions and provide access to financial services to the unbanked.
MAS is paving the way for a safe and trusted environment for consumers and issuers in the developing digital economy.of regulatory This framework is an important first step towards building trust, trust and stability in the cryptocurrency market.
Therefore, as a digital banking As the ecosystem evolves, such policies will become increasingly important to ensure market trust and stability. The MAS approach is a model for other countries seeking to create a balanced and well-regulated environment for stablecoins and other digital assets.
Singapore’s new regulatory framework for stablecoins represents an important milestone in the development of the digital economy. By setting clear standards for stablecoin issuers, MAS will facilitate the integration of digital assets into the mainstream financial system, fostering innovation and financial inclusion. This effort highlights the importance of creating a safe and stable environment for digital finance and promoting trust and stability in the cryptocurrency market.
