Monetary Authority of Singapore (MAS) Announces New Regulatory Framework for Stablecoins

SUMMARY

• ​​The Monetary Authority of Singapore (MAS) has unveiled a new regulatory framework for stablecoins.
• The framework is specifically targeted at single-currency stablecoins (SCS) linked to either the Singapore Dollar or any G10 currency, and issued within the jurisdiction of Singapore.
• SCS issuers will be obligated to adhere to key requirements, including value stability, redemption, capital, and disclosure

The Monetary Authority of Singapore (MAS), on August 15, unveiled a comprehensive regulatory framework aimed at guaranteeing a strong level of value stability for regulated stablecoins within Singapore. This initiative follows an extensive public consultation held in October 2022.

The new framework is specifically targeted at single-currency stablecoins (SCS) linked to either the Singapore Dollar or any G10 currency, and issued within the jurisdiction of Singapore. SCS issuers will be obligated to adhere to key requirements encompassing:

• 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.

Per MAS, only stablecoin issuers that successfully meet all stipulations within this framework are eligible to seek recognition from MAS, branding their stablecoins as "MAS-regulated stablecoins." The label will ensure that users distinguish them from other non-regulated stablecoins. 

Any party found misrepresenting a token as a "MAS-regulated stablecoin" could face penalties as per MAS regulations and could be listed on MAS' Investor Alert List.