Singapore's Regulator Completes Development of Stablecoin Rules

With the growing interest in cryptocurrencies, particularly stablecoins, regulators worldwide are striving to establish clear rules to protect investors and ensure the stability of the financial system. Singapore, being an international financial hub, is also keeping up with the times by developing its regulatory framework.

Singapore is considered one of the most cryptocurrency-friendly jurisdictions in Asia. For at least three years, the country’s authorities have been viewing stablecoins as a potentially valuable tool.

On August 15th, the Monetary Authority of Singapore (MAS) concluded its work on a regulatory framework aimed at ensuring a high level of stability for regulated stablecoins in the country. MAS has put forth several key requirements:

• Companies must consider the composition criteria of stablecoins and ensure their proper storage.
• Assets underlying stablecoins must be backed by a minimum base capital and have additional liquidity to mitigate insolvency risks.
• Organizations are required to reimburse holders the nominal value of assets within five days of a redemption request.
• Issuers should provide users with comprehensive information, including details about the mechanism for maintaining token value, holder rights, and audit results of reserves.

The redemption of single-currency stablecoins regulated by MAS will have a longer grace period of five working days, despite arguments that it should be done in real-time. Besides stablecoin transfers, MAS has also noted that SCS reimbursements require a more extended period.

If you’re planning to start a cryptocurrency-based business in Singapore, consider consulting with specialists in crypto legal services. This will help you strategically plan your activities, taking into account all the new developments.