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Financial regulator of Singapore it is reported that many unsupervised stablecoins face stricter treatment.
During a speech at the Singapore FinTech Festival on 13 November, Director General of the Monetary Authority of Singapore (MAS). Chia Der Jiun noted that “Unregulated stablecoins have a track record of holding their peg”.
Chia pointed out: “There has been a lot of attention to stablecoins. They are proposed as open platforms, able to work in many different applications and use cases.”
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He compared stablecoin depegging to withdrawals from money market funds in 2008. Chia noted that such behavior makes these tokens “unsuitable as safe settlement assets for large wholesale transactions.”
Chia stressed that the The next stage of digital money should focus on speed or programmabilityand also on reliable support and clear redemption rights.
He explained what MAS is finalizing the legislation for its new stablecoin framework. Key requirements will focus on reserve quality and consistent redemption practices.
Chia stated: “Over time, if some regulated stablecoins become systemic, regulatory frameworks will need to be strengthened further, cross-border regulatory cooperation strengthened, and access to central bank facilities considered.”
He also outlined the MASs plans for other forms of digital liquidation assetssuch as wholesale central bank digital currency (CBDC) and tokenized bank liabilities. These ideas were tested through the Borderless, Liquid, Open, Online, Multicurrency (BLOOM) project.
Recently, the Bank of England warned that loosening its proposed stablecoin rules could weaken the UK financial system and potentially restrict lending. How? Read the full story.
