The Monetary Authority of Singapore (MAS) has finalised the key features of its stablecoin regulatory regime and will prepare draft legislation to give issuers clearer operating requirements, Managing Director Chia Der Jiun said at the Singapore Fintech Festival.

The framework places emphasis on strong reserve backing and reliable redemption rights to ensure value stability for users and market participants.

Chia warned that unregulated stablecoins have a patchy record of maintaining their peg, with repeated episodes of de-pegging raising broader confidence risks.

He drew a parallel to the 2008 money market fund crisis, noting that instability in one issuer can spill over to others and undermine trust in the wider ecosystem.

He said such volatility makes unregulated stablecoins unsuitable for large wholesale transactions.

He added that the proliferation of poorly regulated stablecoins in other jurisdictions could weaken confidence even in better-regulated issuers, underscoring the need for sound and consistent standards.

If some regulated stablecoins become large enough to be systemic, Chia said their regulatory framework will need to be strengthened further, supported by deeper cross-border cooperation and possibly access to central bank facilities.

Stablecoins form one of three settlement asset categories MAS is exploring for tokenised markets, alongside wholesale central bank digital currencies and tokenised bank liabilities.

Chia said each option must demonstrate its safety and utility before it can scale, and the long-term success of tokenisation will depend on having settlement assets that anchor value and finality.

MAS is also supporting industry trials through the BLOOM initiative, which tests the use of tokenised bank liabilities and regulated stablecoins as settlement assets.