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The MAS has published new requirements for issuers of Singapore single-currency stablecoins as it finalises its wider regulatory approach in the area. The regulator has set out specific requirements for different types of firms within the digital asset and stablecoin landscape which all relevant firms should review and act on.
Issued on 15th August, ‘Response to Public Consultation on Proposed Regulatory Approach for Stablecoin-related Activities’, is the response to the paper issued in October last year: ‘Proposed Regulatory Approach for Stablecoin-related Activities’. It focuses on the requirements that stablecoin issuers need to meet to be recognised as “MAS-regulated stablecoins”. The requirements mainly pertain to the maintenance of reserve assets, prudential limitations, redemption standards and disclosure to users. MAS also lays out in the paper its regulatory approach toward stablecoin intermediation activities and systemic stablecoin arrangements.
Overall regulatory approach
Scope
Singapore issued, single-currency stablecoins (SCS) pegged to the Singapore dollar or G10 currencies that meet MAS requirements under the SCS framework shall be labelled as MAS-regulated stablecoins. Other stablecoins will continue to be subjected to the existing Digital Payment Token (DPT) regulatory regime.
New regulated activity
MAS will introduce “Stablecoin Issuance Service” as an additional payment service under the Payment Services Act 2019 (PS Act), applicable to SCS.
Non-bank and Bank SCS issuers
Non-bank issuers with less that S$5 million SCS in circulation will not be subjected under the SCS framework. However, they may still apply to conduct “Stablecoin Issuance Service” if they intend for total SCS circulation to exceed S$5 million and would like their SCS to be MAS-regulated stablecoins.
Bank SCS that are issued by tokenising bank liabilities will be excluded from the scope of the SCS framework for now. However, MAS may impose additional requirements on tokenised bank liabilities in the future as necessary, taking into consideration the design of such tokenised bank liabilities.
Differentiating label
As mentioned above and to clarify, MAS will be adopting the label “MAS-regulated stablecoin” for all SCS that fall under the SCS framework. To preserve the credibility of the framework, only SCS regulated under it may use this label.
Requirements imposed on issuers of MAS-regulated stablecoins
Detailed requirements can be found in Annex A of the Response to Public Consultation on Proposed Regulatory Approach for Stablecoin-related Activities for a summary of finalised key requirements.
Requirements on intermediaries offering SCS related services (non-issuance)
- To be regulated as a DPT service provider under the PS Act.
- To transmit of MAS-regulated SCS within 3 business days.
- To segregate customers’ MAS-regulated SCS from own assets.
Requirements imposed on systemic stablecoin arrangements
To protect the smooth functioning of systemic stablecoin arrangements, MAS will regulate them in a similar way to other Designated Payment Systems, by designating them under the PS Act and the Payment and Settlement Systems (Finality and Netting) Act 2002. Key entities of a systemic stablecoin arrangement shall be subjected to higher regulatory and supervisory standards.
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