MAS Finalizes Stablecoin Regulatory Framework

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

MAS's stablecoin regulatory framework will apply to single currency stablecoins (SCS) pegged to the Singapore dollar or any G10 currency issued in Singapore. Issuers of such single currency stablecoins must meet key requirements for:

• Value stability: Single currency stablecoin reserve assets will be subject to requirements regarding their composition, valuation, custody and auditing to provide a high degree of stability in their value.

• Capital: Issuers must maintain minimum underlying capital and liquid assets to reduce the risk of bankruptcy and, if necessary, to be able to wind up the business in an orderly manner.

• Redemption at par: The issuer must refund the face value of the single currency stablecoin to the holder within five business days of receiving the redemption request.

• Disclosure: Issuers must provide users with appropriate disclosures, including information about the Single Currency Stablecoin Value Stabilization Mechanism, Single Currency Stablecoin Holder Rights, and the results of audits of reserve assets.

Only stablecoin issuers that meet all requirements within the framework can apply to MAS to endorse their stablecoins and mark them as "MAS regulated stablecoins". This label will enable users to easily distinguish MAS-regulated stablecoins from other digital payment tokens, including "stablecoins" that are not regulated by the MASS stablecoin regulatory framework. Under MAS's stablecoin regulatory framework, anyone who falsely refers to a token as a "MAS-regulated stablecoin" may be penalized and placed on MAS's investor alert list.

"The Monetary Authority of Singapore's stablecoin regulatory framework aims to facilitate the use of stablecoins as a trusted medium of digital exchange and a bridge between fiat assets and the digital asset ecosystem," said Ms. Ho Hern Shin, Deputy Managing Director of the Monetary Authority of Singapore (Financial Regulation). We encourage single-currency stablecoin issuers that want their stablecoins to be recognised as 'MAS regulated stablecoins' to prepare for compliance as early as possible. "