The Monetary Authority of Singapore (MAS) recently unveiled a framework to enhance the stability of single-currency stablecoins. The Framework, according to Bloomberg, is expected to apply to non-bank issuers who create stablecoins in a single currency linked to the Singapore Dollar or any G10 currency, as long as the circulation exceeds S$5million.
Singapore has implemented comprehensive measures to control stablecoins and ensure a transparent, accountable and responsible framework. The MAS now has a finalized regulatory structure that aims to ensure a high level of stability in the value of regulated stablecoins. This Framework is designed to improve the credibility and acceptability of stablecoins as a medium of digital exchange and a link between digital assets and fiat currencies.
The MAS’s requirements for stablecoins include value stability, capital, redemption at par, and disclosure of audit results to users. The MAS will recognize and designate stablecoins issued by stablecoin issuers that meet the required criteria as “MAS-regulated stablecoins”. This serves as a clear identifier for users, distinguishing MAS-regulated stablecoins from other digital payment tokens operating outside the MAS’s regulatory framework.
The MAS’s regulatory efforts align with a broader campaign to promote transparency and stability within the rapidly expanding industry of stablecoins. Stablecoins such as USDT and USDC are the foundation of cryptocurrency trading, allowing traders to trade digital coins without having to convert them into fiat currency.
The MAS has warned against cryptocurrency investments due to perceived high risk, as exemplified in the collapse of TerraUSD(UST) and Luna tokens. Unsuspecting victims have reported using Bitcoin (70%), Tether (10%) and Ether (9%) as of September 2018, for scammers’ payments.
The U.S. Securities and Exchange Commission (SEC) has taken enforcement action against individuals and entities who were involved in unregistered and fraudulent crypto-asset offerings, highlighting the importance for due diligence and regulatory compliance when investing in cryptocurrency. The SEC’s enforcement actions also extend to charges against SafeMoon LLC and its executive team, alleging fraud and the unregistered offering of crypto securities, leading to losses in market capitalization and investor funds amounting to millions.
The SEC’s Crypto Assets Cyber Unit within the Division of Enforcement has initiated over 80 enforcement actions against fraudulent and unregistered platforms and crypto assets, with a total monetary recovery of over $2 billion. Global regulators are working to protect investors on the crypto market by focusing their investigations on securities law violations in relation to crypto asset offerings and exchanges, as well as lending and staking, decentralized platforms for finance, non-fungible coins, and stablecoins. The goal is to create a safe and compliant crypto environment, while addressing different aspects of the industry to protect the interests of investors.