The Monetary Authority of Singapore (MAS) is looking at how to regulate stablecoins, a release from the agency said.
The bank says it’s considering the merits of a regulatory system centered on the risks and general merits of the coins, which are cryptocurrencies pegged to the value of other assets, usually big currencies like the U.S. dollar.
According to bank minister Tharman Shanmugaratnam, the regulation effort is coming because of the recent volatility and turmoil in crypto, including the collapse of the TerraUSD coin months ago.
“The recent chain of high-profile failures in the cryptocurrency markets, starting from the collapse of the TerraUSD and Luna tokens, illustrates the high risks involved in investments in cryptocurrencies that MAS has warned the public about repeatedly,” Shanmugaratnam said.
And while there’s no information on what rules might come, Shanmugaratnam said the bank would reveal more in the coming months.
There’s been much talk about regulating stablecoins, with many countries proposing rules in the last few months.
The U.S. government has been talking over possible regulations, with Sen. Pat Toomey criticizing the Securities and Exchange Commission (SEC) for the approach it has taken to crypto, calling it “harmful” for both financial innovation and U.S. citizens.
He said it was a bad sign that numerous companies working in crypto had collapsed. For example, Celsius, which was in possession of $12 billion in assets that have been frozen for weeks.
“These firms often promised enormous, seemingly unsustainable interest rates to depositors, and at least one business allegedly engaged in risky practices,” he added, saying that the SEC has been selectively deciding to apply its position on which crypto assets or services fall under its purview.
Toomey said the SEC should’ve listened to calls for guidance on how to apply securities laws to digital assets – moves that could have prevented losses.
Meanwhile, in other crypto news, the New York State Department of Financial Services (NYDFS) has fined the cryptocurrency trading unit of online brokerage Robinhood $30 million for alleged violations of anti-money laundering (AML) and cybersecurity regulations, The Wall Street Journal (WSJ) reported Tuesday (Aug. 2).
The New York state financial regulator’s first crypto enforcement action said Robinhood Crypto “failed to maintain and certify compliant anti-money-laundering and cybersecurity programs,” per the report. Robinhood must also retain an independent consultant to evaluate its compliance.
Robinhood Crypto was found to have triggered “significant failures” based on the NYDFS’ supervisory exam and through a later enforcement investigation.