Singapore is moving to hard-code its stablecoin rules into law, and it’s doing it with the kind of tight, no-nonsense framework the city-state is known for: reserves, redemption, stress tests, wind-down plans, and a sharper line between compliant stablecoins and the rest of crypto’s messy swamp.
- MAS wants stablecoin rules written into the Payment Services Act
- Foreign stablecoins could be recognized, but only selectively
- Interest payments on regulated stablecoins would be banned
- Issuers would face stress tests, recovery plans, and wind-down rules
On Sept. 1, Singapore’s Monetary Authority of Singapore (MAS) published a consultation proposing amendments to the Payment Services Act 2019. The goal is simple enough: turn the country’s stablecoin framework from policy guidance into law, while tightening the guardrails around who gets to use the label and under what conditions.
That matters because stablecoins are only useful if they are actually stable. Not “stable” in the marketing sense. Not stable because a logo says so. Stable in the real-world sense: backed properly, redeemable at face value, and run under rules that stop issuers from turning a payments instrument into a confidence trick.
MAS first consulted on single-currency stablecoin rules in October 2022. In August 2023, it responded to industry feedback and set out requirements covering reserve assets, capital, redemption, and disclosure. The current consultation would put that framework into statute and extend it in a few key directions.
The framework applies to single-currency stablecoins issued in Singapore and pegged to the Singapore dollar or a G10 currency. In plain English, that means stablecoins tied to one fiat currency, not multi-asset concoctions or vague “algorithmic” promises that tend to age like milk in the sun.
Under the regime, stablecoins must maintain value stability, hold proper reserves, allow redemption at par, and disclose the relevant details to users. “Redemption at par” means holders can redeem the token for its full face value in the reference currency, not some haircut when things get ugly.
MAS is also looking at what to do about stablecoins issued outside Singapore. That part matters. Crypto does not politely stop at national borders, and a token that looks clean under one regulator can be a different animal under another. The consultation asks whether Singapore should recognize a limited number of overseas stablecoins if their home regulatory framework is comparable to Singapore’s.
That recognition would be aimed at cross-border wholesale use, meaning institutional and market infrastructure use, not a retail free-for-all where everyone piles in because a token sounds safer than it really is. MAS is not trying to bless every shiny peg with a passport.
One of the more telling proposals is a ban on paying interest on regulated stablecoins. That’s a clear signal that MAS wants these tokens to behave like payment and settlement tools, not as yield-bearing substitutes for deposits, money market products, or whatever Frankenstein structure marketing teams dream up next.
Why draw that line? Because once a stablecoin starts paying yield, the risk profile changes fast. The product begins to resemble something closer to a bank liability or a securities-like instrument, and that opens the door to all the same games, pressures, and failure modes regulators spend their lives trying to contain.
MAS is also proposing stress tests, recovery plans, and orderly wind-down requirements. Stress tests check whether an issuer can survive shocks such as redemption runs, reserve losses, or operational failures. Recovery plans describe how an issuer would respond if things go wrong. Wind-down rules spell out how it shuts down without leaving users stranded in a legal and financial mess.
That last point is not glamorous, but it is essential. Crypto loves to talk about disruption until something breaks, then suddenly everyone is very interested in liabilities, claims, and who is holding the bag. Planning for an orderly exit is not bureaucracy for its own sake. It is the difference between a regulated payments tool and a liquidation circus.
MAS is also seeking feedback on consumer safeguards for money received from customers before stablecoins are issued. That appears to relate to funds held in transit before tokens are minted or delivered, an area where segregation, redemption timing, and insolvency protections can matter a great deal if an issuer fails or delays settlement.
Only licensed issuers under the framework may use the “MAS-regulated stablecoin” label or market themselves as licensed MAS-regulated stablecoin issuers. That’s a narrow but important distinction. Singapore is trying to make the label mean something instead of letting the word “stablecoin” float around like a free-market participation trophy.
Tokens outside the framework remain classified as Digital Payment Tokens, or DPTs, under the Payment Services Act. DPTs are the broader crypto bucket, and Singapore already imposes consumer safeguards there, including restrictions on trading incentives, financing, leverage, and locally issued credit card payments. The point is to curb speculative churn and stop people from borrowing to gamble on volatile tokens.
Ho Hern Shin, MAS Deputy Managing Director for Financial Supervision, said the legislative changes would establish regulatory guardrails for stablecoins that meet MAS requirements for value stability and governance.
“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, ”
That’s the right framing. Stablecoins can be genuinely useful when they are backed properly and used for settlement rather than hype. They can move value quickly, work across borders, and reduce friction in tokenized financial markets. Finance has spent decades making simple transfers feel like bureaucratic hostage situations, so anything that improves settlement deserves attention.
But usefulness only goes so far if the issuer is undercapitalized, opaque, or cavalier about redemption. Stablecoins are not magic. They are only as credible as the reserves, governance, and legal obligations behind them. Without that, “stable” becomes just another buzzword wearing a tie.
Singapore is not approaching this in the abstract. MAS introduced BLOOM in 2025, a program designed to test settlement arrangements using tokenized bank liabilities and regulated stablecoins. On Aug. 25, Visa joined the MAS-led initiative and selected Nium for a stablecoin settlement pilot involving regulated U.S. dollar and euro-backed tokens.
The pilot aims to test settlement seven days a week, including weekends and public holidays, across cross-border payment flows. That may sound mundane, but it gets to the heart of why regulated stablecoins matter: banking systems still stop when the calendar says so, while commerce and digital networks do not.
BLOOM follows Project Orchid, MAS’s earlier effort to explore programmable money and a digital Singapore dollar through more than 10 trials. Participants have included Circle, DBS, OCBC, Partior, Stripe, and UOB. The throughline is obvious: Singapore has spent years testing the plumbing before trying to lock down the rules.
There is also already some live market activity around this direction. OKX Singapore introduced a stablecoin payment service in September 2025 that enables USDT and USDC payments at merchants accepting GrabPay. Payments are converted for settlement in Singapore dollars, with StraitsX’s XSGD used as a bridge. That setup shows how stablecoins often function in practice: not as the final money in the system, but as a transfer and settlement layer behind the scenes.
The broader licensing picture is also filling out. MAS established the main structure of its single-currency stablecoin regime in 2023. Paxos Digital Singapore received full MAS approval in 2024, and DBS was selected to provide stablecoin custody services for Paxos. Cumberland SG secured a Major Payment Institution license in July 2026.
All of that points in the same direction. Singapore wants a stablecoin regime that is narrow, enforceable, and actually usable by institutions. It is not trying to turn every token into money. It is trying to carve out a credible lane for settlement assets that can work inside regulated finance without dragging the whole system into the mud.
The consultation remains open until Oct. 16, 2026. The unanswered questions are the ones that will determine how sharp the final regime becomes: what counts as a comparable foreign framework, how joint issuance between a Singapore entity and a foreign issuer will be handled, how strict the interest ban will be in practice, and what protections will apply to customer funds held before issuance.
If MAS gets those details right, Singapore could end up with one of the cleanest stablecoin frameworks anywhere: strict enough to keep the grifters out, flexible enough to support real settlement use, and clear enough that honest issuers know the rules before they build. That’s not flashy. It’s better than flashy.
Key questions and takeaways
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What is MAS trying to change?
MAS wants to put its stablecoin framework into law through amendments to the Payment Services Act 2019, while adding rules for foreign recognition, interest bans, stress tests, and wind-down planning. -
What counts as an MAS-regulated stablecoin?
It is a single-currency stablecoin issued in Singapore that meets MAS requirements on reserves, capital, redemption at par, and disclosure, and is pegged to the Singapore dollar or a G10 currency. -
Will foreign stablecoins be allowed?
Possibly, but only a limited number. MAS is considering recognition for overseas stablecoins only if their home regulatory regime is comparable to Singapore’s, with the focus on cross-border wholesale use. -
Why ban interest on regulated stablecoins?
Because yield can turn a payments token into something that behaves more like a deposit or investment product, which brings extra risk and regulatory baggage. -
What happens to tokens outside the framework?
They remain Digital Payment Tokens under Singapore law and are subject to separate consumer safeguards, including limits on trading incentives, financing, leverage, and locally issued credit card payments. -
Why does this matter outside Singapore?
Singapore is building a serious model for regulated stablecoin use in payments and tokenized finance. If it works, other jurisdictions may copy the parts that actually protect users instead of just slapping a regulatory sticker on the chaos.
Further reading
For the broader warning signs around tokenized finance, this one is worth a look:
