Singapore Central Bank Introduces Framework for Stablecoin Regulation

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According to a recent report, the Monetary Authority of Singapore provided the regulatory structure and stated that it will be used for non-bank issued stablecoins tied to the market value of the Singapore dollar or the G10 currencies which include the euro, British pound, and US dollar and whose circulation exceeds 5 million Singapore dollars ($3.7 million).

Singapore to Adopt Stablecoin Regulation

On August 15, Ho Hern Shin, the bank’s deputy managing director in charge of financial administration, stated that the structure seeks to foster stablecoin adoption “as a credible digital medium of exchange and as a bridge between the fiat and digital asset ecosystems.”

Opinions Included from Open Dialogues in October 2022

Shin directed the issuers to comply with the recent regulatory framework if they want to label their stablecoin as MAS licensed. As stated by the Singapore regulator, the framework refers to multiple rules for stablecoin issuance companies such as Value stability, Capital, Redemption at Par, and Disclosure. The amended regulatory structure incorporates opinions from an open dialogue held in October 2022. 

Singapore Regulator to Punish Fraudsters

The Monetary Authority of Singapore is going to have to perform conversions, and the legislature must pass amendments for the implementation of the framework.

The new framework stated that people who falsely claim that a token is MAS-certified will be subjected to fines and imprisonment as well as being placed on a watch list. 

Stablecoin Regulation in the US

At a Senate Agriculture Committee hearing in March, Chairman Rostin Behnam of the Commodity Futures Trading Commission (CFTC) stated that stablecoins were to be regarded as commodities provided Congress instructs differently. 

However, because the CFTC believes that all stablecoins are commodities, it could give rise to a clash between them and the SEC. For example, the SEC previously sued Binance stablecoin issuer Paxos with an enforcement action for failing to register the BUSD token as a security. Paxos eventually eliminated the token from its platform, regardless of its disagreement with the SEC that the BUSD token could be considered a security.

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