The Monetary Authority of Singapore (MAS) has expressed optimism about the potential of stablecoins to become a widely adopted means of payment. In a recent interview with The Business Times, MAS managing director Chia Der Jiun highlighted the benefits of stablecoins, emphasizing the importance of regulations to ensure that these crypto assets maintain their value stability.
According to Chia Der Jiun, stablecoins offer enhanced value stability compared to other cryptocurrencies, making them attractive as a payment instrument. MAS believes that with proper regulation, stablecoins have the potential to gain widespread acceptance in the financial sector.
To support the growth of stablecoins, MAS has developed a regulatory approach focused on managing the value stability risk of single-currency stablecoins. The regulatory framework aims to safeguard users and consumers while promoting the adoption of stablecoins in the market.
MAS is currently working on legislative amendments to the Payment Services Act to implement the stablecoin framework. Only stablecoin issuers that meet the regulatory requirements will be eligible to have their stablecoins regulated by MAS as ‘MAS-regulated stablecoins.’ This designation will help distinguish regulated stablecoins from unregulated ones based on their value stability.
While some countries are exploring the idea of issuing central bank digital currencies (CBDCs), MAS has determined that a retail Singapore dollar CBDC is not necessary at this time. The efficiency of electronic payments in Singapore has made the adoption of CBDCs less urgent, as the existing payment infrastructure meets the needs of consumers.
In conclusion, MAS’s positive outlook on stablecoins and efforts to establish a regulatory framework demonstrate its commitment to fostering a safe and efficient payment ecosystem in Singapore. By addressing the value stability risk of stablecoins and promoting regulatory compliance, MAS aims to enhance the credibility and adoption of stablecoins as a viable payment solution in the digital economy.