The Monetary Authority of Singapore (MAS) has revealed plans to publish feedback from its cryptocurrency and stablecoin consultations by mid-2023. This move comes after the central bank issued two consultation papers in October seeking responses on proposed regulatory measures designed to protect consumers from the risks of trading in cryptocurrency and support the development of stablecoins. The consultation period closed on December 21st, and MAS Chairman Tharman Shanmugaratnam has confirmed that the authority received substantial feedback from a wide range of respondents.
In a written reply to a parliamentary question on Monday, Shanmugaratnam explained that MAS is currently reviewing the feedback it received and intends to publish its response to the consultation feedback in the coming months. Proposed regulatory measures for crypto service providers included banning the use of credit facilities and leverage by retail consumers for trading. Meanwhile, for stablecoins, MAS aims to regulate the issuance of single currency-pegged stablecoins with over S$5 million (US$3.7 million) worth in circulation.
One notable aspect of MAS's approach to stablecoins is its plan to allow Singapore banks to issue such assets. This move is significant because it provides a regulatory pathway for banks to issue digital currencies backed by traditional currencies, giving them a foothold in the digital asset space. Singapore has consistently maintained that cryptocurrency is a high-risk asset, restricting advertising and promotion of the industry and blocking cryptocurrency ATM services.
By regulating the issuance of stablecoins, MAS hopes to mitigate some of the risks associated with digital assets while still allowing innovation to flourish. In addition to regulating the issuance of stablecoins, MAS is also considering measures to ensure that such assets are subject to the same anti-money laundering and countering the financing of terrorism (AML/CFT) requirements as traditional financial institutions.
Overall, MAS's approach to cryptocurrency and stablecoins is a cautious one that aims to balance the need for innovation with the need to protect consumers and maintain financial stability. With the publication of its consultation feedback due in mid-2023, Singapore's regulatory stance on digital assets will be closely watched by stakeholders in the cryptocurrency industry.
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