The Monetary Authority of Singapore (MAS) says stablecoins have the potential to become a widely accepted means of payment.
In an interview with The Business Times, MAS director Chia Der Jiun says stablecoins have huge potential, provided there are regulations in place to prevent the crypto assets from straying from their pegged value.
“Stablecoins have features that provide greater value stability, with the potential to become a widely used payment instrument. MAS sees good potential in stablecoins, provided they are well regulated and have a high degree of value stability.
To this end, MAS has finalized a regulatory approach for stablecoins, focusing on regulating the value stability risk of single-coin stablecoins.”
The MAS says it wants to establish a regulatory framework for stablecoins in an effort to protect users and consumers.
“We are working on the necessary legislative changes to the PS (Payment Services) Act to implement the stablecoins framework. Only stablecoin issuers that meet all the requirements of the framework can apply to have their stablecoins regulated by MAS as ‘MAS-regulated stablecoins’. This allows the market to differentiate these stablecoins from other types that are unregulated for their value stability.”
The MAS also says that issuing a central bank digital currency (CBDC) – a stablecoin pegged to a country’s currency, issued by the Reserve Bank – is not currently necessary as cashless payments are already efficient in the country .
“MAS has assessed that the case for issuing a Singapore dollar CBDC in Singapore is not compelling at this time as electronic payments in Singapore are quite ubiquitous, seamless and efficient.”
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Featured image: Shutterstock/Natalia Siiatovskaia/Tithi Luadthong