Singapore Central Bank Releases Regulatory Framework for Stablecoins

The Monetary Authority of Singapore (MAS) has announced the features of a new regulatory framework that seeks to ensure a high degree of value stability for stablecoins regulated in Singapore. The regulatory framework takes into account feedback received, following a public consultation in October 2022.

The regulatory framework will apply to single-currency stablecoins (SCS) pegged to the Singapore dollar or any G10 currency, that are issued in Singapore.

As set out in the MAS announcement, SCS issuers will have to fulfill 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.

You can access the full MAS response to the consultation paper on the regulatory approach to stablecoins here.

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