The Monetary Authority of Singapore (MAS) has introduced a comprehensive regulatory framework designed to oversee the operation of single-currency stablecoins (SCS) within the country’s jurisdiction. This initiative aims to foster stability and trust in the realm of digital currency while establishing a clear demarcation between regulated and non-regulated stablecoins.
The framework, unveiled on August 15, 2023, is targeted at non-bank issued stablecoins that are pegged to the value of the Singapore dollar or G10 currencies including the euro, British pound, and United States dollar. This development comes as a response to the increasing role of stablecoins in the digital financial landscape and their potential impact on the stability of national currencies.
Deputy Managing Director of Financial Supervision at MAS, Ho Hern Shin, affirmed the regulatory framework’s significance, emphasizing its potential to position stablecoins as credible digital mediums of exchange. Shin stated,
“Our objective is to facilitate the use of stablecoins as both a dependable digital medium of exchange and a bridge linking fiat and digital asset ecosystems.”
The regulatory requirements laid out in the framework span several key dimensions:
MAS has indicated that only stablecoin issuers who conform to the regulatory framework’s stipulations can seek recognition as MAS-regulated entities. This distinct classification will help users differentiate between regulated and non-regulated stablecoins, instilling greater trust and confidence.
The central bank has underscored the importance of compliance, stating that individuals or entities falsely representing a token as MAS-certified will be subject to penalties outlined in the framework. These consequences encompass fines, potential imprisonment, and inclusion on an official alert list.
This framework’s development takes into account feedback garnered from a public consultation held in October 2022. Its implementation hinges on further consultations and parliamentary approval of the necessary amendments to formalize the regulatory structure.
As Singapore positions itself at the forefront of digital finance, the MAS’s regulatory framework for stablecoins emerges as a crucial step towards striking a harmonious balance between innovation and financial stability.
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