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Its revised framework will apply to non-bank entities that issue stablecoins pegged to the Singapore dollar or certain G10 currencies with a circulation higher than S$5 million. Approved coins will be labelled as MAS-regulated stablecoins.
"When well-regulated to preserve such value stability, stablecoins can serve as a trusted medium of exchange to support innovation, including the 'on-chain' purchase and sale of digital assets," said the MAS in a statement on Tuesday.
StraitsX is currently the only firm to offer a stablecoin pegged to the Singdollar, XSGD.
The new framework, which will be rolled out later this year, include:
- Minimum Reserves: Issuers must also be able to maintain a portfolio of reserve assets "with very low risk" and at least 100% of the outstanding single-currency stablecoins in circulation.
- Segregated Reserves: Issuers must hold reserve assets in segregated accounts from their own assets. This could also be in overseas custodians that have a minimum credit rating of A- with a branch in Singapore.
- Capital Requirements: A minimum base capital higher than S$1 million or half of annual operating expenses must be maintained.
- Redemption: Issuers must reimbursement of stablecoins at par value to holders within five business days of the redemption request.
- Singapore Only: Stablecoin issuers must operate solely from Singapore.
MAS has been warming towards Web3. Recently, the regulator launched a S$150 million technology and innovation fund.
The announcement comes just one month ahead of the highly anticipated Token2049 event in Singapore, which brings together crypto industry leaders from around the world.