Abstract:
This article provides guidance on the key differences between the regulatory characteristics of “MAS-regulated stablecoins” versus other types of stablecoins that would be regarded as “digital payment tokens” under the Payment Services Act 2019 of Singapore (“PSA”), and the similarities and differences in regulatory treatment applicable to these different types of stablecoins. While the PSA licensing requirement could potentially apply to both issuers of MAS-regulated stablecoins and digital payment token service providers (“DPTSPs”), some of the key business conduct requirements differ due to the different policy objectives underpinning the regulatory framework for issuers of MAS-regulated stablecoins and DPTSPs. Generally, issuers of MAS-regulated stablecoins will be subject to requirements designed to maintain a high degree of value stability, including requirements relating to the composition, valuation and independent attestation of the reserve assets backing the value of the MAS-regulated stablecoins. On the other hand, there has been an increased focus on consumer protection for customers of DPTSPs. This article provides an update on the consumer protection measures under the Guidelines on the Provision of Consumer Protection Safeguards by Digital Payment Token Service Providers, which were recently revised by the Monetary Authority of Singapore on 19 September 2024.