Today the Monetary Authority of Singapore (MAS) opened a consultation on stablecoins, following a previous one in 2019. Responses must be received by December 21. Two of the most thoughtful aspects are how bank-issued stablecoins can co-exist with other stablecoins and how to regulate a stablecoin issued in multiple jurisdictions.
The regulator plans to create a new activity, Stablecoin Issuance Service, for organizations that issue and redeem stablecoins. Banks can choose to issue stablecoins which are tokenized bank deposits, in which case there are no additional regulatory requirements given they are already regulated.
Alternatively, a bank, like non-bank stablecoin issuers, can choose to set aside ring-fenced reserves. This type of stablecoin will be called a regulated or securely-backed stablecoin, no matter the nature of the issuer. And for regulated stablecoins, banks will have to comply with stablecoin rules just like non-banks, apart from prudential requirements, which are already dealt with in the Banking Act.
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