Our country plans to legislate to regulate stablecoins to enhance regulatory transparency and public confidence.

Written by: Li Tao

With some foreign regions recently passing or implementing laws related to the issuance of stablecoins, Singapore plans to launch a public consultation on stablecoin legislation within this year. Stablecoin operators have expressed that this move will enhance local regulatory transparency and boost public confidence in digital assets.

Stablecoins are a category of cryptocurrency that are pegged to certain currencies, commodities, or financial instruments to reduce price volatility. Therefore, compared to more volatile cryptocurrencies like Bitcoin, stablecoins are more commonly used as a medium of payment and transaction.

Many regions are accelerating the promotion of stablecoin legislation to attract large issuers to apply for licenses.

Recently, some regions have been accelerating the promotion of stablecoins. On July 18, U.S. President Trump signed the "Genius Act" to regulate stablecoins, while Hong Kong's "Stablecoin Ordinance" is set to take effect in August, and many large stablecoin issuers plan to apply for licenses.

There are market reports indicating that Ant International, the international business company of Ant Group headquartered in Singapore, plans to apply for a stablecoin license simultaneously in both New Harbor locations.

The Monetary Authority of Singapore announced a regulatory framework for issuing stablecoins locally in 2023, but this framework has not yet become formal law.

Regarding the upcoming deployment, a spokesperson for the Monetary Authority responded to inquiries from Lianhe Zaobao, stating that the authorities are formulating amendments to formalize the regulatory framework.

"We plan to conduct public consultations on the proposed amendments later this year. Before that, entities considering the issuance of stablecoins may also apply for a license for digital payment tokens (Digital Paymen!Token, abbreviated as DPT), under the Payment Services Act."

Support and timely redemption requirements are incorporated into legislation, setting clear standards for safety and accountability in Singapore.

According to the regulatory framework for stablecoins released by the Monetary Authority in August 2023, it categorizes stablecoins into single currency stablecoin ( Single-currency stablecoin ) and non-single currency stablecoins.

The former is eligible to apply for MAS-regulated stablecoins (. They must meet a series of requirements, including an issuance volume of over 5 million yuan, and the issuer must hold reserve assets consisting of at least an equivalent amount in cash or short-term government bonds.

If it does not meet the conditions to become a "stablecoin regulated by the Monetary Authority", it will be regarded as a DPT under the existing Payment Services Act and subject to relevant regulation.

After completing a round of public consultation at the end of 2023, the Monetary Authority indicated its intention to incorporate the relevant framework into the Payment Services Act. In November of the same year, the then-Director of the Monetary Authority, Norman Chan, announced that principle approval letters had been issued to three stablecoin issuing entities. Once the legislation is completed, these stablecoins will be regarded as regulated by the Monetary Authority.

Straitsx is one of the first issuers of Singapore dollar-pegged stablecoins in the local market and is also one of the operators who have received in-principle approval from the Monetary Authority of Singapore. The company's Chief Legal Officer, Liang Shengfeng, expressed welcome during an interview regarding the Monetary Authority's plan to initiate legislative procedures.

"The relevant measures have enhanced regulatory transparency and strengthened public trust in the digital asset ecosystem. This is through the full reserve stablecoin issuer StraitsX's Chief Legal Officer Liang Shengfeng."

The regulations in our country are more relaxed, and applying for supervision by the Monetary Authority is voluntary.

It is worth noting that even the legislation and the stablecoin regulations in Singapore will differ from those in other regions.

The upcoming "Stablecoin Regulation" in Hong Kong stipulates that only operators with a stablecoin license can carry out issuance activities; the U.S. "Genius Act" also requires that the issuance of stablecoins must be authorized by federal or state government.

However, under our country's framework, seeking regulation from the Monetary Authority is voluntary.

Simmons & Simmons JWS) partner Wang Yingyu said in an interview that our country's more relaxed regulations bring possibilities for regulatory arbitrage.

Wang Yingyu said: "Those stablecoin issuers in Singapore that do not seek regulation from the Monetary Authority of Singapore actually have greater room to operate and explore business opportunities, without having to bear the regulatory burden that comes with licensing."

The relevant measures have enhanced regulatory transparency and strengthened public trust in the digital asset ecosystem. By incorporating requirements such as full reserve support and timely redemption into legislation, Singapore has established clear standards for safety and accountability.