Singapore's New Framework for Stablecoins: Key Highlights

The Monetary Authority of Singapore (MAS) has established a comprehensive framework for stablecoins, recognizing their potential to revolutionize digital payments. This framework, known as the 'SCS framework,' focuses on regulating single-currency stablecoins pegged to the Singapore dollar or G10 currencies issued within Singapore. Non-SCS stablecoins will remain under the existing Payment Services Act 2019 jurisdiction, with the possibility of extending oversight in the future.

For non-bank SCS issuers, exemptions are provided for those with a circulation below S$5 million, while issuers aiming to exceed this threshold can apply for a Major Payment Institution (MPI) license. Bank SCS issuers will see distinctions made between asset-backed stablecoins and tokenized bank liabilities, with the latter excluded from the SCS framework.

The framework introduces the term 'MAS-regulated stablecoin' to distinguish compliant stablecoins. It also addresses the redemption of stablecoins to fiat currency within five business days and mandates low-risk reserve asset portfolios, emphasizing transparency and trust. SCS issuers must maintain a minimum base capital of S$1 million and focus primarily on stablecoin issuance, avoiding higher-risk ventures.

MAS encourages the use of the 'MAS-regulated stablecoin' label to discourage multi-jurisdictional issuance, while remaining open to future collaborations as the stablecoin landscape evolves. The framework aims to ensure monetary sovereignty and financial stability while guiding Singapore's financial ecosystem into the future.