Singapore Implements Framework for Stablecoin Regulation
The Monetary Authority of Singapore (MAS) has released a regulatory framework for stablecoin providers operating in the country. The framework aims to protect investors and prevent insolvency within the stablecoin industry. Stablecoin providers who wish to comply with the framework must meet certain requirements. Here are the key points:
1. Requirements for stablecoin providers: Providers must maintain a minimum capital base and other illiquid assets to limit the risk of insolvency. They must also return the nominal value of stablecoins within five business days upon request and publish mechanisms for maintaining the peg and minimizing volatility.
2. Audits and documentation: Providers must conduct audits of reserves, document custody arrangements, and communicate information about legal rights to supervisory bodies.
3. Goal of expansion: The framework aims to expand the stablecoin niche in Singapore while mitigating the risk of failure. The MAS wants to support stablecoins as a digital medium of exchange and a bridge between fiat and digital asset ecosystems.
4. Compliance and flexibility: Stablecoin issuers in Singapore are encouraged to adapt early for compliance. The MAS clarified that the issuance, use, or circulation of stablecoins falling outside the framework will not be prohibited, demonstrating flexibility in the regulatory approach.
5. Market overview: Tether (USDT) currently dominates the stablecoin market, followed by USDC, DAI, and BUSD. The euro leads the market for non-dollar stablecoins, with the Australian dollar and British pound following.
In conclusion, Singapore has implemented a regulatory framework to regulate stablecoin providers, aiming to protect investors and ensure stability within the industry. Compliance with the framework is encouraged, and the MAS remains flexible regarding stablecoins that do not fall within the framework. The stablecoin market is currently dominated by Tether, and the euro leads the market for non-dollar stablecoins.
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