Wednesday, May 22, 2024

Singapore’s Central Bank Releases Regulatory Framework for Stablecoins_ Latest Crypto News.

The central bank of Singapore has introduced an updated set of regulations designed to ensure the stability of single-currency stablecoins (SCS) that fall under its jurisdiction.

The structure, directed towards stablecoins not issued by banks and linked to the Singapore dollar or major G10 currencies such as the euro, British pound, and US dollar, and with a circulation surpassing 5 million Singapore dollars ($3.7 million), was unveiled by the Monetary Authority of Singapore on August 15th.

According to Ho Hern Shin, the deputy managing director for financial supervision at the bank, the purpose of the framework is to establish stablecoins as a reputable digital means of transaction and as a connection linking the fiat and digital asset realms.

If stablecoin issuers wanted their stablecoin to be referred to as MAS-regulated, Shin advised them to get ready for compliance.

The framework stipulates a number of regulations for stablecoin issuers, including capital requirements, reserve management, disclosures, and redemption schedules, per MAS:

Value stability: To provide a high level of assurance of value stability, reserve assets will be subject to requirements relating to their composition, valuation, custody, and audit.

Capital: In order to limit the risk of insolvency and facilitate a smooth business wind-down in the event that it becomes required, stablecoin issuers must maintain minimum base capital and liquid assets.

Redemption at Par: Within five business days of receiving a redemption request, issuers must give holders their stablecoins’ par value back.

Disclosurez: Users must get the proper disclosures from issuers, including details on the rights of SCS holders, the value stabilising mechanism for the SCS, and the audit findings of reserve assets.

Only stablecoin issuers that satisfy the new framework’s requirements can apply to be MAS-regulated, according to MAS, which the central banks claim ensures consumers can tell them apart from unregulated stablecoins.

It stated that people who falsely claim that a token is MAS-certified will be subject to the new framework’s sanctions, which include fines and imprisonment as well as being placed on an alert list.

The updated regulatory framework takes into account suggestions made during a public consultation in October 2022. To enforce the framework, MAS must have discussions, and parliament must approve modifications.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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