Singapore's central bank, the Monetary Authority of Singapore (MAS), has introduced an updated regulatory framework with the aim of ensuring the stability of the single currency stablecoin (SCS) under its regulation. The framework was announced on August 15 and primaril y targets non- bank-issued stablecoins linked to the Singapore dollar (SGD), valuing around US$3.7 million, which are pegged to the SGD or G10 currencies like the US dollar, euro, and British pound. For stablecoins to be eligible for this regulatory framework, they should have a circulation of over 5 million units.
The Deputy Managing Director of Financial Regulation at MAS, Ho Hern Shin, explained that the new framework seeks to encourage the use of stablecoins as reliable digital mediums of exchange and bridges between fiat currencies and digital asset ecosystems. Shin encouraged stable coin issuers to ensure compliance if they aim to have their stablecoins designated as regulated by MAS. The framework delineates a range of requirements from MAS for stablecoin issuers, including criteria related to value stability, capital, redemption schedules, closures, and reserve management.
MAS emphasized that only stablecoin issuers meeting the criteria set out in the new framework can apply to be regulated by the central bank. This regulatory label is intended to help users distinguish regulated stablecoins from unregulated ones. The central bank cautioned that those who falsely claim MAS certification for tokens will be subject to penalties outlined in the framework, such as fines, imprisonment, and inclusion in an alert list. The revised regulatory framework reflects input gathered from a public consultation in October 2022. The implementation of the framework requires consultations by MAS and subsequent amendments passed by Parliament.
