Stablecoin

Bank AI

Terra

Change

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  Neither the author, Ruholamin Haqshanas, nor this website, The Tokenist, provide financial advice. Please consult our&nbsp;<a href="https://tokenist.com/terms-of-service/" style="text-decoration:underline;color:#3c7b7b" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">website policy</a>&nbsp;prior to making financial decisions. 
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<p class="has-drop-cap">The Monetary Authority of Singapore (MAS) <a href="https://asia.nikkei.com/Spotlight/Cryptocurrencies/Singapore-to-label-regulated-stablecoins-in-transparency-push" target="_blank" aria-label=" (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">issued a new framework to regulate stablecoins</a>, asking issuers to meet different rules on value stability, minimum capital, and more. The move comes after months of collecting feedback on the new framework and <a href="https://tokenist.com/singapore-to-tighten-regulations-after-string-of-high-profile-crypto-bankruptcies/" rel="noopener noreferrer nofollow" class="deco-link">proposed to tighten crypto regulations</a> in October 2022.</p> 
<h3 id="issuers-must-back-stablecoin-at-100-of-market-value-at-least">Issuers Must Back Stablecoin At 100% of Market Value At Least</h3> 
<p>The Central Bank of Singapore released a new regulatory framework for stablecoins on Tuesday after <a aria-label="collecting feedback (opens in a new tab)" href="https://www.lexology.com/library/detail.aspx?g=3dd7bc1e-65d5-49af-a69c-c4bfb360d392" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">collecting feedback</a> from the public for several months.&nbsp;</p> 
<p>According to Asia Nikkei, the new guidelines will apply to nonbank issuers of single-currency stablecoins tied to the Singapore dollar (SGD) or any other G10 fiat currency if circulation exceeds 5 million SGD ($3.68 million). The MAS plans to hold a public consultation on legislative amendments in 2024.</p> 
<blockquote class="wp-block-quote"> 
 <p>“When well-regulated to preserve such value stability, stablecoins can serve as a trusted medium of exchange to support innovation, including the ‘on-chain’ purchase and sale of digital assets.” </p> <cite>– the authority said in a statement.</cite> 
</blockquote> 
<p>Stablecoin issuers must adhere to key rules for value stability, capital, and disclosure, among others, to win certification for their digital assets from the MAS. One of the requirements asks issuers to hold reserve assets of at least 100% stablecoin’s value in circulation at all times in liquid assets such as cash and cash equivalents.&nbsp;</p> 
<p>In addition, the issuers also must make sure that stablecoin users can redeem the value of fiat-pegged assets at par within five business days. The new framework sets a minimum base capital of 1 million SGD or half the issuer’s yearly operating expenses.&nbsp;</p> 
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<h3 id="singapore-s-change-in-stance-toward-crypto">Singapore’s Change in Stance Toward Crypto</h3> 
<p>The new regulatory framework underscores the MAS’s commitment to bringing greater clarity and scrutiny to the burgeoning crypto industry while stimulating innovation in the city-state.&nbsp;</p> 
<p>Singapore’s central bank and financial regulator <a href="https://tokenist.com/singapore-signals-change-in-stablecoins-regulation-after-terras-collapse/" rel="noopener noreferrer nofollow" class="deco-link">signaled changes in stablecoin regulations</a> a year ago after the collapse of the Terra ecosystem sent shockwaves through the sector. The crash caused a knock-on effect, pushing local crypto firms such as Three Arrows Capital and <a href="https://tokenist.com/voyager-digital-files-for-bankruptcy-as-terra-lunas-contagion-looms/" rel="noopener noreferrer nofollow" class="deco-link">Voyager Digital</a> into bankruptcy.</p> 
<p>As a result, the MAS proposed new, stricter regulations for crypto investors in October 2022, including a ban on debt-financed and leveraged trading. The authority also <a aria-label="banned advertisements (opens in a new tab)" href="https://www.reedsmith.com/en/perspectives/2023/06/the-mas-proposes-additional-regulations-for-prospecting-and-marketing-of#:~:text=The%20proposed%20regulations%20come%20after,Token%20Services%20to%20the%20Public." target="_blank" rel="noopener noreferrer nofollow" class="deco-link">banned advertisements</a> for crypto services in public spaces amid a sharp surge in crypto investors in the Asian hub.&nbsp;</p> 
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<p><em><strong>How do you think the MAS’s recent efforts would impact the broader crypto landscape in Singapore? Let us know in the comments below.&nbsp;</strong></em></p> 
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/singapores-mas-finalizes-framework-for-stablecoin-regulation/">Singapore’s MAS Finalizes Framework for Stablecoin Regulation</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Singapore’s MAS Finalizes Framework for Stablecoin Regulation

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