Singapore plans ban on stablecoin interest

TLDR

Singapores regulator is consulting on rules that would ban interest payments on officially regulated stablecoins, tightening how safe stablecoin products can be marketed in the country.

1. The Monetary Authority of Singapore (MAS) has proposed amendments to the Payment Services Act that prohibit interest on MAS?regulated stablecoins, with public feedback open until 16 Oct 2026.
2. The ban targets issuer?paid yield and other benefits for just holding a regulated stablecoin, but does not directly outlaw trading, DeFi, or offshore yield products that are outside this label.
3. The move aligns Singapore with a wider global trend of treating stablecoins as low?risk payment assets, so the key thing to watch now is how issuers and exchanges redesign their products to comply.

Deep Dive

1. What MAS Is Proposing

On 1 Sep 2026, MAS published proposed legislative amendments to the Payment Services Act 2019 that would prohibit interest payments on MAS?regulated stablecoins and add stress tests, recovery planning, and stronger customer safeguards for issuers. These changes implement and extend Singapores existing Single?Currency Stablecoin framework for tokens pegged to the Singapore dollar or G10 currencies such as USD and EUR.

Only issuers licensed under this framework could use the MAS?regulated stablecoin label, and they would be barred from paying holders interest or similar benefits just for keeping the token. These measures are still at the consultation stage, with MAS accepting comments until 16 Oct 2026, so they are not yet law but are clearly the preferred regulatory direction.

2. Impact On Stablecoin Products In Singapore

The interest ban focuses on issuer?paid yield, for example a wallet or platform promising a fixed percentage return simply for holding an MAS?regulated stablecoin. Regulators worry that such products look like deposit accounts and could compete with bank funding, while being backed by different safeguards.

Other returns that come from trading, DeFi protocols, or offshore platforms are not explicitly banned by this proposal, but they would sit outside the regulated MAS?stablecoin perimeter and therefore lack the marketing benefit of that label. Providers that want to advertise their tokens as MAS?regulated may need to strip out passive yield features and reposition them purely as payment or settlement tools.

3. Global Context And What To Watch

Singapores plan fits a broader pattern. US rules like the GENIUS Act and some Federal Reserve guidance also restrict or ban interest paid simply for holding payment stablecoins, and international bodies such as the BIS have raised concerns about bank funding and run risk in yield?bearing stablecoins.

MAS is also exploring ways to recognize a limited set of foreign stablecoins that meet comparable standards, potentially giving selected USD or EUR tokens a regulated path into Singapore while still applying the interest ban. The next key milestone is the close of the consultation in October and any revised draft MAS publishes afterward. Changes to how major issuers like Circle or bank?backed projects structure their Singapore offerings will be one of the clearest signals of market impact.

Conclusion

Singapore is moving to define stablecoins as tightly regulated payment instruments, not yield?bearing savings products. If these rules are adopted, MAS?regulated stablecoins in Singapore will prioritize reserves, redemption, and safeguards over passive interest, pushing yield into more clearly risk?marked channels and reinforcing a cautious, payments?first approach to stablecoin regulation.