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Singapore unveils regulatory framework for stablecoins

The Monetary Authority of Singapore (MAS) recently unveiled a regulatory framework aimed at strengthening the stability of single currency stablecoins.

According to Bloomberg, the framework is expected to be applicable to non-bank issuers of single-currency stablecoins linked to the Singapore dollar or any other G10 currency, provided their circulation exceeds S$5 million.

Singapore MAS launches new regulations on stablecoins

Singapore has implemented comprehensive measures to regulate stablecoins, aiming to establish a more transparent and accountable framework for their operations in the country.

The MAS has now finalized a regulatory structure whose primary objective is to ensure a high degree of stability in the value of regulated stablecoins in Singapore. This framework is designed to strengthen the credibility of stablecoins as a digital medium of exchange and a bridge between fiat and digital asset ecosystems.

The MAS stable regulatory framework encompasses requirements regarding stability of value, capital, repayment at par and disclosure of audit results to users.

Only stablecoin issuers meeting all specified criteria may apply to MAS for recognition and designation of their stablecoins as “MAS-regulated stablecoins”.

This designation serves as a clear identifier for users, distinguishing MAS-regulated stablecoins from other digital payment tokens, including stablecoins not subject to the MAS regulatory framework.

These regulatory efforts by MAS align with a broader initiative to promote transparency and stability within the rapidly expanding stablecoin sector. The regulatory label not only ensures compliance with standards, but also facilitates user differentiation between MAS-regulated stablecoins and other digital payment tokens operating outside of MAS’s stablecoin regulatory framework.

Stablecoins, cryptocurrencies linked to legal tender, find a conducive environment in Singapore thanks to thoughtful regulation and a pro-innovation atmosphere. The MAS regulatory approach aims to facilitate the use of stablecoins as a trusted means of digital exchange, acting as a bridge between the fiat and digital asset ecosystems.

Tokens meeting all specified requirements will be recognized by the regulator, establishing a clear distinction between regulated and unregulated tokens.

Traditionally, stablecoins like USDT and USDC have served as the basis for cryptocurrency trading, allowing traders to navigate various digital coins without the need to convert them back to fiat currency.

As stablecoin issuers assert their versatility for purposes such as remittances, criticism has surfaced regarding the transparency of their held reserves. Singapore is seeking to improve clarity in the sector in response to these concerns.

Avoiding Crypto Risks

According to a US research report, unsuspecting victims reported using Bitcoin (70%), Tether (10%) and Ether (9%) as their primary cryptocurrencies for payments to fraudsters.

Last year, the MAS advised against investing in cryptocurrencies due to perceived high risks, illustrated by notable failures like the collapse of the TerraUSD (UST) and Luna tokens.

In the United States, regulators have identified investments linked to cryptocurrencies and digital assets as the main threat to investors, citing a lack of government support and the potential for significant fluctuations in their value.

The Securities and Exchange Commission (SEC) has also taken enforcement action against individuals and entities involved in fraudulent and unregistered offerings of cryptoassets, emphasizing the importance of due diligence and regulatory compliance in crypto investments. cryptocurrency.

The SEC’s enforcement actions also extend to charges against SafeMoon LLC and its management team, alleging fraud and an unregistered offering of crypto securities. These actions led to significant losses in market capitalization and misappropriation of investor funds, amounting to billions.

The SEC’s Crypto Assets and Cyber ​​Unit within the Division of Enforcement has initiated more than 80 enforcement actions regarding fraudulent and unregistered crypto asset offerings and platforms, resulting in monetary relief exceeding $2 billion. dollars.

These regulatory efforts by global regulators aim to protect investors in crypto markets. Their investigations focus on securities law violations related to crypto asset offerings, exchanges, lending and staking products, decentralized finance platforms, non-fungible tokens, and stablecoins.

The aim is to ensure a secure and compliant environment within the crypto space, addressing various aspects of the sector to protect the interests of investors.

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