The Monetary Authority of Singapore (MAS) has finalized new regulations concerning single-currency, non-government-issued stablecoins.
Issued Regulations On Stablecoins in Singapore
The Monetary Authority of Singapore (MAS) has finalized new regulations concerning single-currency, non-government-issued stablecoins.
Stablecoins linked to fiat currencies from countries like Belgium, Canada, France, and other G10 nations, as well as the Singapore dollar are covered by these regulations.
Stablecoin issuers are required to maintain adequate reserve assets to ensure stability, as well as a minimum capital base and liquid assets. They also need to be able to return the par value of stablecoins to holders within five business days of a redemption request, and they must comply with disclosure rules.
Private issuers back stablecoins largely 1:1 with cash, currency equivalents, and short-term treasuries. When a stablecoin is redeemed, the issuer destroys the stablecoin asset and grants the seller a fiat value in exchange. Stablecoins can serve as reliable cross-border transfer mediums by maintaining price stability through arbitrage trading on centralized exchanges.
Frameworks for secure stablecoin use are being established in other jurisdictions as well. On July 27, the US Senate approved a bill that will make stablecoins subject to anti-money laundering laws. Similar to Singapore's strategy, the Clarity for Payment Stablecoins Act suggests a minimum capital requirement, redemption guidelines, and federal and state regulation for stablecoin issuance. A two-year restriction on algorithmic stablecoins like TerraUSD is also added.