Singapore central bank advances stablecoin framework

TLDR

Singapores central bank is moving to hard-code a strict stablecoin framework into law, with full-reserve, non-yielding tokens and a new MAS-regulated stablecoin label.

1. The Monetary Authority of Singapore (MAS) has opened consultation on proposed amendments to the Payment Services Act to create a formal, dedicated regime for stablecoin issuers.
2. The draft rules require 100% reserves, par redemptions, no interest on MAS-regulated stablecoins and enhanced stress testing, wind-down plans and consumer safeguards.
3. MAS may also recognize certain jointly issued or foreign stablecoins, so the outcome will shape which tokens become trusted payment rails in Singapore and potentially beyond.

Deep Dive

1. What MAS Is Proposing

MAS has published draft amendments to the Payment Services Act to turn its earlier policy work on stablecoins into enforceable law and to create a dedicated stablecoin issuance license. The regime would reserve the MAS-regulated stablecoin label for issuers that fully comply with the framework, including capital, disclosure and governance standards, as outlined in MAS-focused coverage of the proposed Payment Services Act amendments.

The framework targets single-currency stablecoins issued in Singapore and pegged to the Singapore dollar or a G10 currency, and the proposals are currently at consultation stage with comments open until 16 October 2026. Until these amendments are finalized, no new obligations apply, but the direction of travel is clear.

2. Key Requirements For Issuers

Under the proposal, issuers seeking the MAS-regulated label must hold reserves equal to at least 100% of outstanding tokens and guarantee redemption at par within defined timeframes. They would face bans on paying interest or yield linked to stablecoin balances, so regulated stablecoins are positioned as payment and settlement tools, not investment products.

Issuers would also need to run regular stress tests, maintain recovery and orderly wind-down plans, and protect customer funds received before tokens are issued. Stablecoins that do not opt into, or fail, this regime would remain classified as digital payment tokens under existing, less specialized rules.

3. Foreign And Cross-Border Stablecoins

MAS is also proposing paths for some cross-border and foreign stablecoins to fit into its regime. Jointly issued tokens, where a Singapore entity and a foreign partner share issuance, could qualify as MAS-regulated stablecoins if risks are sufficiently mitigated. Separately, MAS may selectively recognize a limited number of foreign-issued stablecoins that are supervised under comparable overseas frameworks, particularly for cross-border wholesale payments.

Recognition will not be automatic, so major tokens like USDT or USDC would need to meet MAS standards and be explicitly accepted. How MAS draws these lines will matter for which stablecoins can be marketed and used as regulated settlement assets in Singapores banks, fintechs and DeFi-facing businesses.

Conclusion

Singapore is not banning stablecoins. It is trying to channel them into a clearly defined, fully reserved, non-yielding role as trusted payment and settlement assets. For issuers, that means higher compliance costs and licensing. For users and institutions, it points toward a smaller roster of highly regulated stablecoins that could become preferred rails for payments, tokenized assets and cross-border flows once the framework is finalized.