Singapore regulator takes steps to control stablecoin market
Singapore regulator takes steps to control stablecoin market
Singapore is stepping up its efforts to become Asia's leading cryptocurrency hub and is therefore committed to creating a conducive regulatory environment for the development of digital assets and innovative technologies.
As part of its program to ensure transparency and stability in the stablecoin industry, the Monetary Authority of Singapore (MAS) has finalized a regulatory framework, the main objective of which is to enhance the stability of single-currency stablecoins.
The new rules and requirements aim to regulate neobank issuers of single-currency stablecoins pegged to the Singapore dollar or any G10 currency with a turnover in excess of S$5 million.
At the same time, the MAS aims to build confidence in stablecoins as a digital medium of exchange and a bridge between fiat money and digital assets through a regulatory framework.
According to the Cryptonews website, the Monetary Authority of Singapore's new rules for stablecoins include requirements for value stability, capital, redemption at par, and disclosure of audit results to users.
The regulator notes that companies that fully comply with the established criteria can apply to have their stablecoins recognized and labeled as "MAS-regulated stablecoins". This label will increase the credibility of the stablecoin and attract new users.
The MAS began creating the new regulatory framework after more and more market participants became aware of the lack of transparency in the reserves of stablecoin issuers.
Importantly, stablecoins allow for much easier transfers and serve as the basis for cryptocurrency trading, allowing traders to move between different digital coins without the need for additional conversion.
However, following the collapse of the TerraUSD (UST) and Luna tokens, the Monetary Authority of Singapore has advised against investing in cryptocurrencies due to the perceived high risks.
The U.S. Securities and Exchange Commission (SEC) made the same call, stating that investments related to cryptocurrencies and digital assets carry high risks and pose a major threat to investors.
Such actions show that the main goal of global regulators is to protect investors in cryptocurrency markets as well as create a safe, high-standard environment in the crypto space.
Read also: UK will stick to its own AI control policy.
