MAS seeks feedback on proposals regulating value, user protection for stablecoins

The Monetary Authority of Singapore (MAS) is seeking feedback on proposed legislative changes that would determine which stablecoin issuers can be regulated by the authority, and the safeguards they must meet to protect users and keep the value of their tokens stable.

MAS on Tuesday (Sep 1) issued a consultation paper on proposed legislative changes to the Payment Services Act, which sets out the regulatory framework for stablecoins in Singapore.

Known as the MAS Single-Currency Stablecoin framework, the legislation only allows issuers licensed by the regulator to describe themselves as “MAS-regulated stablecoins”.

This will help users distinguish well-regulated stablecoins from other cryptocurrencies that claim to be “stablecoins” – but are not subject to MAS regulation to keep their value stable.

Stablecoins not regulated by MAS will be treated as digital payment tokens (DPTs) and be subject to the same consumer protection safeguards that apply to this asset.

DPTs are cryptographically secured digital representations of value used, or intended to be used, as a medium of exchange.

The proposed changes include requirements for issuers to ensure their stablecoins retain their value, maintain sufficient capital, allow users to redeem the tokens at their original value, and provide relevant disclosure to users.

Additionally, the authority is seeking feedback on policy positions in further areas related to stablecoin regulation, taking into account recent developments and best practices globally.

Such areas include the multi-jurisdictional issuance of stablecoins, recognition of foreign-issued stablecoin, additional requirements to safeguard financial stability, and more consumer protection safeguards.

The full consultation paper is available on MAS’ website, and interested parties may submit their feedback by Oct 16.

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MAS: Consultation on Proposed Amendments to the Payment Services Act 2019 for Stablecoins Regulation

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