Singapore pushes into crypto regulation with new stablecoin framework
- The central bank would label these crypto tokens as MAS-regulated stablecoins.
- This way users would be able to distinguish these coins from non-regulated stablecoins.
Singapore’s central bank, the Monetary Authority of Singapore (MAS), issued a new stablecoin regulatory framework. Released on 15 August, the framework aims to improve the stability of single-currency stablecoins.
According to the central bank, the stablecoin framework will apply to non-bank issuers of single-currency stablecoins linked to the SGD, GBP, and USD, with a circulation value greater than S$5 million.
The central bank would label these crypto tokens as MAS-regulated stablecoins.
For the implementation of the process, the MAS will need to hold legislative discussions before the Parliament of Singapore passes the amendments.
The framework lists down several requirements for stablecoin issuers, including redemption timelines, disclosures, reserve management and capital requirements.
The MAS has suggested stablecoin issuers to prepare for compliance if they want their stablecoins to be labelled as MAS-regulated. This way, users would be able to distinguish these coins from non-regulated stablecoins.
The central bank warned that it would penalize MAS-regulated stablecoin issuers violating norms as per the new framework which includes fines and imprisonment. These issuers would also be added to an alert list.
The revised regulatory framework incorporates feedback from a public consultation held in October 2022.
Asian superpower pushing for crypto regulation
In June, the MAS issued a new set of rules for crypto firms. It required crypto service providers to hold customer assets in a statutory trust by year-end. It also required crypto firms to conduct daily reconciliation of customer holdings, besides maintaining proper books and records.
Earlier, the MAS collaborated with the Bank for International Settlements (BIS) to develop a comprehensive framework pertaining to the tokenization of assets and the implementation of DeFi protocols.
Last month, the High Court of Singapore ruled that crypto assets are legally recognized as property in the country.
Only recently, the Monetary Authority of Singapore (MAS), the country’s central bank, announced that it would commit $112 million over a period of three years to promote the financial technology sector. The scheme would also cover fintech institutions active in Web3.
The MAS is planning to provide grant funding to encourage actual trials and facilitate the commercialization of these solutions later.
In Singapore, we are witnessing a gradual introduction of crypto-specific rules and regulations.