The MAS has requirements for companies that want to issue a stablecoin under its watch.
The framework will be available to non-bank issuers as per the Central Bank.
In an effort to improve the reliability of single-currency stablecoins, Singapore’s central bank, the Monetary Authority of Singapore (MAS), issued new guidelines on August 15.
For single-currency stablecoins having a circulation value of more than S$5 million tied to the Singapore Dollar or any fiat of the G10 nations, the MAS has said that the structure will be available to non-bank issuers. These tokens would be designated by the central bank as MAS-regulated stablecoins.
But before the modifications can be passed by Parliament, the Monetary Authority of Singapore must undergo legislative consultations. There is a subset of cryptocurrencies called single-currency stablecoins that are pegged to fiat assets like national currencies. Singapore has only released one stablecoin so far. Governments continue to be optimistic about regulating crypto markets in light of the increased engagement of people.
Stringent Approach
As a result, leading economies like Singapore and the United States are actively working to regulate stablecoins. The international monetary fund (IMF) and JPMorgan Chase are just two of the leading financial organizations that have helped develop standards for digital currency in Singapore.
The MAS has requirements for every company that wants to issue a stablecoin under its watch. Stablecoins must adhere to these requirements by maintaining a constant value, holding sufficient reserves to cover redemption demands, and disclosing audit results to users.
According to the regulations, stablecoin issuers must have reserves of very liquid assets equal in value to the whole amount of their stablecoins. Also, more than S$1 million, or at least 50% of annual operating expenditures, should be in reserve.