Singapore regulator completes framework for stablecoins

The Monetary Authority of Singapore (MAS) has completed work on the regulatory framework aimed at ensuring a high degree of resilience of locally regulated stablecoins.

According to the authority’s definition, “stablecoins” are digital payment tokens designed to maintain a stable value relative to one or more related fiat currencies.

New rules in Singapore will apply to single-currency stablecoins (SCS) pegged to the Singapore dollar or to any currency of the countries in the the G-10 issued in the jurisdiction.

MAS highlighted several key requirements:

• issuers must consider the criteria for the composition of stablecoins and ensure their proper custody;
• the assets must be backed by a minimum base capital and have additional liquidity to reduce insolvency risk;
• issuers must redeem holders at the nominal value of the asset within five days of a redemption request;
• issuers must disclose full information to users, including details of the mechanism for maintaining token value, holder rights, and the results of reserve audits.

“The regulatory framework for stablecoins is aimed at facilitating their use as a reliable digital medium of exchange, and as a bridge between traditional and cryptocurrency assets,” said Ho Herng Shin, Deputy Managing Director.

Earlier, the Monetary Authority of Singapore promised to allocate more than $110 million to support fintech solutions in the country, including Web3.

In June, MAS presented a report with the results of work in partnership with the Bank for International Settlements on Project Guardian. The initiative is aimed at studying the alignment of tokenisation and DeFi with international standards.

Earlier in July, the regulator ruled that Singapore-serving bitcoin exchanges must transfer client digital assets to trusts for custody.

In the same month, a local court in a case involving Bybit ruled that the stablecoin USDT is property that may be held in trust.