4.11.1. Ongoing information to holders of Fiat stablecoins or Commodity Stablecoins

(1) Issuer of a Fiat stablecoin or Commodity Stablecoin must in a clear, accurate and transparent manner disclose at least once a quarter, on a publicly and easily accessible place on its website, the amount of Fiat stablecoins or Commodity Stablecoins in circulation, and the value and the composition of the reserve assets.

(2) In case of a Fiat stablecoin, the published information must demonstrate that the reserves:

(a) are at least equal in value to the notional value of outstanding Fiat stablecoins in circulation (that value is calculated by multiplying the number of Fiat stablecoins in circulation by the purported pegged Fiat Currency value);

(b) are denominated in the reference currency; and

(c) are held in segregated accounts with properly regulated custodians.

(3) Issuer of a Fiat stablecoin or Commodity Stablecoin must publish as soon as possible on a publicly and easily accessible place on its website a brief, clear, accurate and transparent summary of the audit report and the full and unredacted audit report in relation to the reserve assets.

(4) Issuer of a Fiat stablecoin or Commodity Stablecoin must as soon as possible and in a clear, accurate and transparent manner disclose on its website any event that has or is likely to have a significant effect on the value of the Fiat stablecoin or Commodity Stablecoin, or on the reserve assets.

4.11.2. Redemption rights

(1) Issuer of a Fiat stablecoin or Commodity Stablecoin must grant holders redemption rights at all times on the issuer of a Fiat stablecoin or Commodity Stablecoin, and on the reserve assets when the issuer is not able to comply with its obligations. 

(2) Holders should be able to redeem their Fiat stablecoins or Commodity Stablecoins at any moment and at par value againts the referenced asset, by delivering the assets backing the Commodity stablecoins or other means approved by the AFSA. 

(3) Issuer of a Fiat stablecoin or Commodity Stablecoin must ensure that all requests made by holders, with valid client agreements with the issuer of a Fiat stablecoin or Commodity Stablecoin, to redeem the Fiat stablecoin or Commodity Stablecoin at par are processed and completed:

(a) promptly and no later than 5 working days of any such requests, in case of a Fiat stablecoin, or within reasonable timeframe, in case of a Commodity stablecoin; or

(b) if the trading or settlement of the reserve assets is subject to significant disruption events beyond the control of an issuer of a Fiat stablecoin, promptly and no later than 5 working days of the trading or settlement of reserve assets no longer being significantly impacted by such disruption events, in case of a Fiat stablecoin, or within reasonable timeframe, in case of a Commodity stablecoin.

(4) Issuer of a Fiat stablecoin or Commodity Stablecoin is allowed to charge a reasonable fee for processing and completing redemption requests. The redemption fee must be clearly disclosed on the website of the issuer of a Fiat stablecoin and must be proportionate and commensurate with the actual costs incurred by the issuer of a Fiat stablecoin in completing the redemption request.

(5) Issuer of a Fiat stablecoin or Commodity Stablecoin must establish, maintain and implement clear and detailed policies and procedures setting out:

(a) the conditions, including thresholds, periods and timeframes, for holders of a Fiat stablecoin or Commodity Stablecoin to exercise this right;

(b) the mechanisms and procedures to ensure the redemption of the Fiat stablecoins or Commodity Stablecoin;

(c) the valuation, or the principles of valuation, of the Fiat stablecoins or Commodity Stablecoins and of the reserve assets when this right is exercised by the holder of a Fiat stablecoin or Commodity Stablecoin; 

(d) the settlement conditions when this right is exercised; and

(e) measures the issuer of a Fiat stablecoin or Commodity Stablecoin is taking to adequately manage increases or decreases of the reserve, to avoid any adverse impacts on the market of the assets included in the reserve.

4.11.3. Ongoing capital

(1) In addition to DAA 4.2(b), an issuer of a Fiat stablecoin or Commodity Stablecoin must ensure that it maintains at all times ongoing capital resources in the amount of 2% of the average outstanding Fiat stablecoins or Commodity Stablecoins in relation to each category of Fiat stablecoin or Commodity Stablecoin issued by it.

(2) The ongoing capital referred to in 4.11.3(1) should consist of the Common Equity Tier 1 items and instruments.

(3) If an issuer of a Fiat stablecoin or Commodity Stablecoin offers more than one category of Fiat stablecoins or Commodity Stablecoins, the amount of the average outstanding Fiat stablecoins or Commodity Stablecoins should be the sum of the average amounts of the reserve assets backing each category.

Guidance:

The term ‘average outstanding Fiat stablecoins or Commodity Stablecoin’ refers to the average amount of reserve assets at the end of each calendar day, calculated over the preceding 6 (six) months. If the relevant period does not exceed 6 (six) months, an issuer of a Fiat stablecoin or Commodity Stablecoin should calculate the average outstanding Fiat stablecoins or Commodity Stablecoins based on the actual data.

4.11.4. Prohibitions

(1) Issuer of a Fiat stablecoin or Commodity Stablecoin is prohibited from granting any interest to holders of the Fiat stablecoin or Commodity Stablecoin.

(2) For the purposes of this Rule, any remuneration or any other benefit related to the length of time during which a holder of a Fiat stablecoin or Commodity Stablecoin holds such a Fiat stablecoin or Commodity Stablecoin must be treated as interest.

(3) The interest includes net compensation or discount, with an equivalent effect of an interest received by the holder, directly from the issuer or through third parties, directly associated with the Fiat stablecoin or Commodity Stablecoin or through the remuneration or pricing of other products.

(4) The issuance of stablecoins that aim or purport to maintain a stable value via protocols that provide for the increase or decrease of the supply of such stablecoins or other digital assets in response to changes in demand is prohibited.