Monetary Authority of Singapore proposes new measures to regulate crypto, stablecoins


The Monetary Authority of Singapore (MAS) released two consultation documents via its official website on October 26, highlighting regulatory measures for implementation applicable to digital payment token services and stablecoin issuers.

The paper is based on the premise that crypto-assets are “inherently speculative and risky,” and MAS’s idea of ​​banning the sector outright, Watchdog said.

Digital assets such as Bitcoin, Ether, Litecoin, Dash, Monero, Ripple, Zcash, and stablecoins such as USDT and USDC are currently treated as digital tokens under the Payment Services Act 2019 (PSA).

DPT service providers are regulated primarily for money laundering and terrorism financing, technology risks, and obligations to provide consumer risk warning disclosures.

A research paper titled “”Consultation Document on Proposed Regulatory Measures for Digital Payment Token Services“When “Consultation Paper on Proposed Regulatory Approach to Stablecoin-Related Activities“Proposing measures to build on the PSA.

Digital payment token service

In a paper on digital payment token services, MAS proposed that DPTSPs require customers to take a risk knowledge assessment test before accessing cryptographic services and provide educational content to consumers about the risks of DPT services. I’m here.

According to regulators, DPTSPs should not be allowed to offer financial or non-monetary incentives for customer or service referrals.

Additionally, Watchdog has proposed restrictions on debt financing and leveraged DPT trading. This means that the DPTSP provides credit facilities to its customers to purchase cryptocurrencies, initiates leveraged cryptocurrency transactions with its customers, and accepts payments from retail customers using credit. means that it should not Use your card to conduct transactions with DPT services.

Other significant measures include requiring DPTSP to segregate client assets from reserves.

Regulation of stablecoins

Regarding stablecoins, the regulator said stablecoins fall into multiple categories – single currency pegged stablecoins (SCS), algorithmic stablecoins, and currency basket pegged stablecoins. .

Regulators Propose Stablecoin Issuers to be Subject to Anti-Money Laundering and Terrorist Financing Requirements and Technology and Cyber ​​Risk Management Like All Regulated Payment Service Providers and Banks Did.

This means that stablecoin issuers must meet minimum requirements to hold a license, be independently verified monthly, and have high reserve assets to back their issued SCS. increase. It is in constant circulation and only in the form of cash, cash equivalents or bonds issued by the central bank of the pegged currency.

Watchdog also proposed only allowing stablecoins pegged to the Singapore dollar or Group 10 (G10) currencies such as the US dollar and the euro.

Posted In: Singapore, Regulation

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