Singapore is moving closer to regulating stablecoin issuers under a dedicated framework.
The Monetary Authority of Singapore (MAS) is seeking feedback on changes to the Payment Services Act 2019.
These would establish the requirements issuers must meet to qualify as MAS-regulated stablecoin issuers.
Who Can Use the MAS Stablecoin Label
Only issuers licensed under the regime could describe themselves as MAS-regulated stablecoin issuers or market their tokens as “MAS-regulated stablecoins”.
The restriction is intended to help users distinguish these tokens from other cryptocurrencies marketed as stablecoins without equivalent safeguards to preserve their value.
Non-MAS-regulated stablecoins would be treated as digital payment tokens and subject to the consumer protection measures that apply to these assets.
The proposed requirements cover capital, disclosures and value stability.
Issuers would also need to allow users to redeem their stablecoins at face value.
The regime would apply to single-currency stablecoins issued in Singapore and pegged to the Singapore dollar or a G10 currency.
Foreign Stablecoins Could Gain Recognition
MAS is also considering whether stablecoins jointly issued by a Singapore issuer and a foreign issuer should qualify.
They could be included if the associated risks are adequately addressed.
A limited number of foreign-issued stablecoins may also gain recognition if they are overseen under comparable rules in their home markets.
The proposal takes into account their potential use in cross-border wholesale transactions.
Other measures would prohibit interest payments on MAS-regulated stablecoins.
Issuers would also need to conduct stress tests and prepare plans for recovery or an orderly wind-down.
They may also have to safeguard customer funds received before issuing the corresponding stablecoins.
Ho Hern Shin, MAS Deputy Managing Director (Financial Supervision), said,
“MAS’ proposed legislative amendments will give effect to a stablecoin framework that promotes responsible financial innovation. The framework will provide clear regulatory guardrails for stablecoins that meet high standards of value stability and governance.
This is important as asset tokenisation gains traction. Trusted and well-regulated stablecoins can serve as a credible settlement asset in tokenised financial markets, while mitigating risks to users and the broader financial system.”
MAS first consulted on its stablecoin framework in October 2022 and published its response to feedback in August 2023.
The consultation closes on 16 October 2026, with responses accepted through FormSG.
Featured image: Edited by Fintech News Singapore, based on image by — via Magnific
