Singapore proposes legal framework to regulate stablecoins

The Monetary Authority of Singapore (MAS) published a consultation paper proposing amendments to the Payment Services Act 2019 to implement a licensed single-currency stablecoin framework called MAS-SCS. The framework would set rules on value stability, capital, redemption and disclosure for issuers that seek MAS regulation.

The paper explains how issuers may qualify for MAS-SCS regulation and the safeguards they must meet to support stable value and protect users. Only issuers licensed under MAS-SCS would be allowed to describe themselves as licensed MAS-regulated stablecoin issuers or to label tokens as “MAS-regulated stablecoins.” Tokens that do not meet MAS-SCS requirements would be treated as Digital Payment Tokens and remain subject to the consumer protection rules that apply to DPTs under the Payment Services Act.

Key requirements under consultation include measures to maintain value stability, minimum capital requirements, mandatory redemption at par and enhanced disclosure to users. MAS also proposes safeguards aligned with those for existing Payment Services Act licensees, including requirements to protect customer monies received before stablecoins are issued. The consultation seeks feedback on operational and governance standards for regulated issuers.

On cross-border issues, MAS proposes allowing multi-jurisdictional issuance when a stablecoin is jointly issued by a Singapore and a foreign issuer, provided the combined arrangement sufficiently mitigates risks. MAS also proposes recognising a limited number of foreign-issued stablecoins for cross-border wholesale use where those tokens are regulated under foreign frameworks MAS judges comparable to its standards.

To strengthen resilience and protect financial stability, the paper proposes additional requirements for MAS-regulated stablecoins: a prohibition on paying interest on the stablecoins themselves, mandatory stress testing of reserve arrangements, and requirements for recovery planning and orderly wind-down procedures for issuers.

Ms Ho Hern Shin, MAS Deputy Managing Director (Financial Supervision), commented: “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. 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 invites interested parties to submit comments by 16 October 2026 via FormSG. The authority says the proposals take into account recent international developments and are designed to support tokenised financial markets while safeguarding consumers and financial stability.