Singapore Regulators plan to consult public in Stablecoin Regulations

The Minister in Charge of the Monetary Authority of Singapore (MAS), Tharman Shanmugaratnam, in response to Parliamentary Question No. 1902, inquiry into the extent of exposure to citizens of Singapore after TerraUSD Stablecoin (UST) and Luna Token recent collapsed.

To ask the Prime Minister (a) whether there is data on the extent of Singaporeans exposure to the recent collapse in value of the TerraUSD (UST) stablecoin and the Luna token; (b) whether there are further systemic risks to the economy arising out of fundraising efforts to shore up the UST through the Luna Foundation Guard; and (c) what is the status of the MAS review and consideration of its overarching regulatory approach towards crypto assets including stablecoins.

In addressing the issues raised, Minister in Charge Shanmugaratnam confirmed that the overall impact to mainstream economy was minimal as Singapore’s banking institutions have little exposure to cryptocurrencies. In regards to the extent of exposure to Singaporeans, MAS was unable to analyze and provide information on the number of citizens affected by the collapse due to lack of data on cryptocurrency holdings among Singapore’s public.

Following the collapse of Three Arrows Capital, MAS on June 30th reprimanded the hedge fund for providing false information and exceeding assets under management threshold.

MAS today announced that Three Arrows Capital Pte. # Enforcement # rules

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Mass (@MAS_sg) June 30, 2022

The minister also mentioned that regulators are working to treat stablecoins as a unique asset class, with a focus on regulating peg stability and reserve requirements. He said that MAS will consult the public in the coming months after assessing the merits of a regulatory regime.

Singapores Payment Services Act

Despite calls for more crypto regulation in the region, MAS is still open to crypto companies acting under the Payment Services Act.

It is still possible to grant licenses to digital asset providers looking to operate in the region. So far, Singapore has granted 14 licenses and approvals in principle to companies such as Crypto.com, Gemini, Coinbase and Binance.

Shanmugaratnam said when asked about Singapore’s plans of becoming a cryptocurrency hub:

From a development perspective, MAS’ aim was and still is to enable the growth of an innovative and responsible digital asset ecosystem.