Singapore wants to implement regulations that address the specific risks of stablecoins, but what will that look like? The public will be consulted before the Monetary Authority of Singapore decides.
of the TerraUSD stablecoin and the Luna token and whether the MAS is actively considering measures to tackle similar crises.
Shanmugaratnam acknowledged that the Terra collapse illustrates the high risks of the crypto investment but insisted that the turmoil hasn’t affected the mainstream financial system and the economy significantly. In the majority of his answer, the official revealed MAS’ current plans for stablecoins. He claimed that MAS is actively reviewing its approach to the regulation of stablecoins, as the existing framework, in which stablecoins, alongside other cryptocurrencies, are being considered digital payment tokens , doesn’t cover the specific risks.
Hence, MAS “is assessing the merits of a regulatory regime” tailored to the specific characteristics of stablecoins. It shall focus on such aspects as regulating the reserve requirements and the stability of the peg. As the response specifies, MAS intends to consult the public on the possible guidelines in the upcoming months.
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