The Monetary Authority of Singapore (MAS) has proposed regulatory measures that could reduce the risks of cryptocurrency trading for the consumer and support the development of stablecoins as a credible medium of exchange. Some of these measures are discussed below.
To reduce the risk to consumers from speculative trading in cryptocurrencies, MAS will require cryptocurrency service providers (CSPs) to disclose all relevant risks to retail consumers so they can make informed decisions regarding cryptocurrency trading. CSPs will also have to appropriately segregate customer assets and develop procedures to handle complaints. Moreover, the MAS will require CSPs to ensure high availability and recoverability of their critical systems to mitigate technology-related risks.
MAS has also proposed to regulate the issuance of certain stablecoins. It will require all relevant stablecoin issuers to hold reserve assets in cash or certain debt securities. All stablecoin issuers will also have to comply with auditing and reserve segregation requirements. Moreover, all stablecoins, under the purview of the proposed measures, that are issued in Singapore can be pegged only to the Singapore dollar or another currency from a restricted set. Further, stablecoin issuers will have to publish a white paper disclosing all relevant details pertinent to stablecoin holders.
Source: Monetary Authority of Singapore