How Singapore’s stablecoin rules could boost crypto’s ‘mainstream’ banking role
- Industry executives say the proposed rules by the Monetary Authority of Singapore are timely and will boost investor confidence
- Recent moves by Hong Kong and Europe on rules governing stablecoins will also spur wider adoption of cryptocurrencies, according to the executives
The unpredictable price fluctuations of cryptocurrencies have been a make-or-break game for myriad investors across Asia for months.
However, only a handful of regional policymakers have ventured to integrate these volatile assets into the mainstream financial landscape.
Unlike other cryptocurrencies, stablecoins are viewed as safe haven assets as their values are pegged to traditional currencies or other assets such as government bonds and gold.
The Monetary Authority of Singapore’s (MAS) regulations announced last week will apply to nonbank users of single-currency stablecoins pegged to the Singapore dollar, or any currency from the world’s 10 biggest economies, and would require issuers to maintain low-risk reserves and return par value to investors within five days of receiving a redemption request.
“The MAS seems to be paving the way for greater trust and potential formal integration of stablecoins into the banking system.