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Aug 18, 2023 17:38
Singapore has become the first in the world to regulate stablecoins.
Stablecoins are a type of digital currency whose exchange rate is pegged to fiat currencies or exchange commodities such as gold or oil.
Currently, the stablecoin market is valued at approximately $125 billion. Previously, stable digital coins were not regulated at the state level.
Singapore's authorities have taken the initiative to change this globally. The country's Monetary Authority (MAS) has already proposed key requirements for this type of cryptocurrency, including:
• Reserves backing stablecoins must be held in highly liquid, low-risk assets.
• Reserves must always equal or exceed the value of the stablecoin in circulation.
• Stablecoin issuers must return the nominal value of the digital currency to owners within five business days upon redemption request.
• Issuers must also provide "appropriate data disclosure" to users, including audit results of reserves.
These rules will apply to stablecoins issued in Singapore and pegged to the Singapore dollar or any G10 currency, such as USDT and USDC.
Stablecoins meeting all requirements will be recognized as "MAS-regulated stablecoins," distinguishing them from other tokens. The launch of regulatory mechanisms will be announced next year.
It is expected that implementing these measures will significantly strengthen market participants' trust and stimulate the growth of stablecoin circulation.
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