Singapore’s Central Bank Sees Good Potential for Stablecoins To Become Widely Used Payment Instrument

The Monetary Authority of Singapore (MAS) says that stablecoins have the potential to become a widely adopted means of payment.

In an interview with The Business Times, MAS managing director Chia Der Jiun says stablecoins have immense potential provided that regulations are in place to keep the crypto assets from straying from their linked value.

“Stablecoins have features that provide more value stability, with the potential to become a widely used payment instrument. MAS sees good potential in stablecoins provided they are well-regulated to have a high degree of value stability.

To this end, MAS finalized a regulatory approach for stablecoins, focusing on regulating the value stability risk of single-currency stablecoins.”

The MAS says it’s looking to establish a regulatory framework for stablecoins in an effort to protect users and consumers.

“We are working on the necessary legislative amendments to the PS (Payment Services) Act to implement the stablecoins framework. Only stablecoin issuers that fulfill all requirements under the framework can apply for their stablecoins to be regulated by MAS as ‘MAS-regulated stablecoins.’ This will allow the market to differentiate these stablecoins from other types that are not regulated for their value stability.”

The MAS also says that issuing a central bank digital currency (CBDC) – a stablecoin pegged to a nation’s currency issued by its reserve bank – is currently not needed at this time as cashless payments in the country are already efficient.

“MAS has assessed that the case for issuing a retail Singapore dollar CBDC in Singapore is not compelling at this juncture, as electronic payments in Singapore are quite pervasive, seamless and efficient.”

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