Singapore Tries Digital Debt And Prepares Stablecoin Regulations

Chia Der Jiun, MAS Managing Director, in his main speech at the Singapore FinTech Festival (photo; x @EpicPlain)

JAKARTA The Monetary Authority of Singapore (MAS) will conduct a trial of issuing central bank debt securities in the form of digital tokens (tokened MAS bills) next year as well as introducing legislation to regulate stablecoins, as part of a step to strengthen a secure digital financial ecosystem that can develop globally.

"Tokenization has started to take off. However, has asset-based tokens reached orbital speed? Not yet," said Chia Der Jiun, MAS Managing Director, in her main speech at the Singapore FinTech Festival on Thursday, November 13.

Chia explained that MAS is currently finalizing a stablecoin regulatory framework and will prepare a bill with a focus on strong reserve support and the reliability of the redeeming process.

In addition, MAS also supports a series of trials under the BLOOM initiative, which examines the use of tokenized bank liabilities and stablecoins which are regulated as a means of completing financial transactions.

On the same occasion, Chia announced that three major Singaporean DBS, OCBC, and UOB'' banks had successfully carried out interbank loan transactions overnight lending using the Singapore dollar's CBDC (central bank digital currency) in the first direct trial.

CBDC is a digital form of central bank money. MAS plans to expand the trial by combining the tokenization of MAS bonds (MAS bills) which are completed using CBDC.

Chia also revealed that regulatory guidelines for tokenized capital market products will be published this week. MAS is working with global regulators to align standards and encourage adoption of financial asset tokenization.

On Thursday, MAS also announced cooperation with a number of other central banks, including:

The Bank of England (England) and the Bank of Thailand, to test real-time, secure, and interconnected foreign exchange transactions between systems;

Deutsche Bundesbank (Germany), through the signing of a memorandum of understanding (MoU) to collaborate in the settlement of cross-border digital assets.

According to MAS, this partnership is part of a global effort to increase financial market liquidity and efficiency through asset tokenization a step that further strengthens Singapore's position as a center for digital financial innovation in the Asian region.