The Monetary Authority of Singapore (“MAS“) is seeking feedback on two consultation papers which set out proposed enhanced regulatory measures for digital payment token (“DPT“) services under the Payment Services Act 2019 and the regulatory approach for stablecoins in Singapore.
Cryptocurrency speculation activities among retail investors were on an upward trend until the recent crypto markets shake-up, which saw the collapse of TerraUSD (a stablecoin) and the value of popular cryptocurrencies like Bitcoin and Ether plunging steeply.
To reduce the risk of consumer harm in cryptocurrency trading, MAS issued the “Consultation Paper on Proposed Regulatory Measures for Digital Payment Token Services” to seek comments on its proposals to introduce consumer access measures for retail customers of DPT service providers, business conduct measures and enhanced measures to manage technology and cyber risks for DPT service providers.
Despite the negative news associated with some stablecoins lately, MAS is of the view that, unlike cryptocurrencies, stablecoins can be a credible digital medium of exchange to facilitate transactions in a digital asset ecosystem. MAS intends to develop an innovative and responsible digital asset ecosystem in Singapore by leveraging on the innovative combination of tokenisation and distributed ledgers. Against this backdrop, MAS issued the “Consultation Paper on Proposed Regulatory Approach for Stablecoin-Related Activities” to seek comments on its regulatory approach on stablecoin-related issuance and intermediation activities.
Comments on these two MAS consultation papers must be submitted to MAS by 21 December 2022.
This Update highlights the key proposals discussed in the two MAS consultation papers.
For more information, click here to read the full Legal Update.
