Singapore's central bank 'actively reviewing' its approach to regulating stablecoins

The Monetary Authority of Singapore is currently assessing its approach to the regulation of stablecoins following May's collapse of algorithmic stablecoin TerraUST (UST-USD). As of now, stablecoins alongside cryptocurrencies like bitcoin (BTC-USD) are considered digital payment tokens under the Payment Services Act in which money laundering and terrorism financing are among the primary tackling points within the regulatory regime. "Alongside other regulators globally, MAS is actively reviewing its approach to the regulation of stablecoins," Tharman Shanmugaratnam, the minister in charge of Singapore's central bank, wrote in response to a question from Parliament on Monday. While a string of other high-profile failures have taken hold since Terra's meltdown, "spillovers to the mainstream financial system and the economy remain limited at this point," Shanmugaratnam said. Moreover, depository institutions have "insignificant exposures" to the cryptoverse, the senior minister added. In reference to stablecoins' characteristics and risks, the MAS is exploring the "merits of a regulatory regime," according to Shanmugaratnam. That could range from rules involving reserve requirements for stablecoin issuers like Tether (USDT-USD) issuer Circle, to the stability of a stablecoin's peg to a fiat currency such as the U.S. dollar. Shanmugaratnam concluded that the MAS will consult with the public about the evolving matter in the coming m...