The Monetary Authority of Singapore (MAS) has finalised its new stablecoin regulatory framework which included feedback from a public consultation in October 2022.

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

The 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.

The issuers of such SCS will have to maintain minimum base capital of S$ 1 million and liquid assets to reduce the risk of insolvency and enable an orderly wind-down of business if necessary.

Additionally, they must return the par value of SCS to holders within five business days from a redemption request.

Issuers will also have to 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.

Only stablecoin issuers that fulfil all these requirements under the framework can apply to MAS for their stablecoins to be recognised and labelled as “MAS-regulated stablecoins”.

Ho Hern Shin, Deputy Managing Director (Financial Supervision), MAS said,

“MAS’ stablecoin regulatory framework aims to facilitate the use of stablecoins as a credible digital medium of exchange, and as a bridge between the fiat and digital asset ecosystems.

 

We encourage SCS issuers who would like their stablecoins recognised as “MAS regulated stablecoins” to make early preparations for compliance.”