The Financial Authority of Singapore (MAS) has released a session paper looking for trade suggestions on its proposed regulatory method for stablecoins and associated actions within the city-state.
Main cryptocurrency companies Ripple and Circle submitted detailed responses to the session, providing their views on key points like regulatory scope, stablecoin issuance necessities, reserve belongings, redemption insurance policies, and systemic danger administration.
MAS goals to introduce laws targeted on “single foreign money pegged stablecoins” (SCS) issued in Singapore whereas treating unstable crypto belongings and algorithmic stablecoins underneath present guidelines.
Ripple claims it helps MAS’ intent to focus initially on regulating Singapore-issued SCS however cautions that SCS from outdoors Singapore should still turn into systemically necessary over time. It suggests MAS undertake laws to handle dangers whereas nonetheless enabling innovation.
Circle agrees that concentrating on SCS is acceptable, noting its personal USDC stablecoin is regulated within the US and strictly pegged 1:1 to money reserves. Nonetheless, it warns in opposition to proscribing using main offshore SCS in Singapore, as this might restrict Singaporean entry to their advantages and liquidity.
On stablecoin issuance guidelines, Ripple endorses MAS’ proposal for a brand new regulated exercise of “Stablecoin Issuance Service” underneath the Fee Companies Act. Circle additionally helps the licensing framework for non-bank issuers as cost establishments however argues that bank-issued “tokenized deposits” shouldn’t be handled equivalently to “tokenized money” backed absolutely by liquid belongings like Circle’s USDC.
Each companies agree with utilizing a single label for financial institution and non-bank-issued SCS. Ripple suggests “regulated stablecoin,” whereas Circle proposes phrases indicating “regulated” or “securely-backed.”
For reserve belongings, Ripple and Circle warning in opposition to necessities to carry all reserves onshore in Singapore, particularly for international currency-pegged SCS. Ripple urges cooperation between regulators on constant international requirements. Circle notes USDC reserves are held throughout jurisdictions to satisfy numerous regulatory wants.
On redemptions, the companies usually help MAS’ proposed 5 enterprise day restrict however name for extra readability on definitions and transmission necessities for intermediaries. Ripple advocates a tiered system of obligations on issuers and repair suppliers to make sure ample diligence.
For prudential safeguards, Ripple and Circle again proposed capital buffers and exercise restrictions however request flexibility for legally separate associates. Circle argues that bank-issued “tokenized deposits” warrant extra stringent necessities than fully-reserved “tokenized money.”
Each agree international SCS might probably develop massive sufficient to pose systemic dangers in Singapore. They help MAS preparedness to adapt laws if wanted. Nonetheless, Ripple asks MAS to develop clear standards for labeling preparations as “systemic.” Circle cautions in opposition to overly restrictive requirements that might hamper offshore SCS utility.
