The Monetary Authority of Singapore (MAS) has proposed a regulatory framework for stablecoins with separate issuance licenses

The Monetary Authority of Singapore (MAS) has published consultation document P015-2026, proposing amendments to the Payment Services Act 2019, thereby transitioning the regulatory framework for single-currency stablecoins from policy guidance.

9/1/20264 min read

Interest-free moratorium and international compliance.

The prohibition against issuers paying interest or calculated benefits based on customers' stablecoin balances is the most commercially impactful provision in the proposal and reflects a deliberate policy stance rather than a technical requirement. MAS stated in its consultation that stablecoins should be used for payment purposes, not for the public as an investment product or to generate returns, viewing the ban as a matter of instrument classification: a stablecoin that pays returns economically functions as a deposit or investment product and should be regulated as such, not within a payment framework.

This approach aligns Singapore with two other major stablecoin regulatory frameworks that have been developed globally. The US GENIUS Act explicitly prohibits stablecoins that pay interest or returns, a provision that reshaped the US stablecoin market by diverting institutional capital from stablecoin balances to tokenized Treasury products that could legally pay returns. The European Union’s Crypto Asset Market Regulation also imposes a similar ban. MAS describes its approach as consistent with international regulatory practice, placing Singapore on par with, rather than in competition with, the US and EU frameworks on this particular issue.

The actual scope of the ban depends on details that MAS has yet to finalize. The consultation notes that the final handling will depend on the agreement, the beneficiary, and whether the payment is actually linked to holding the stablecoin, leaving open questions about third-party yield agreements, where exchanges, wallet providers, or DeFi protocols, rather than the issuer, pay returns to stablecoin holders. That distinction is commercially important as it determines whether products like Ethena Pay's tiered savings interest rates, launched on the same day in 48 countries (excluding Singapore), can operate under a structure compliant with Singapore law with returns paid by a party other than the issuer.

100% inventory required.

The reserve framework requires licensed issuers to maintain a minimum reserve asset value equal to 100% of the face value of their circulating stablecoins at all times, held in separate accounts, comprising highly liquid assets with low credit and market risk, and backed by independent reserve custody agreements, pricing processes, and certifications. This 100% minimum aligns with the 2023 policy framework previously finalized by MAS, giving this requirement legal effect rather than introducing a new standard.

The Monetary Authority of Australia (MAS) is seeking industry input on a question it remains unresolved: whether to require a minimum reserve ratio specifically held in cash or bank deposits rather than other low-risk, liquid assets such as short-term government bonds. The consultation cites thresholds between 5% and 60% used in the UK and European Union regulatory frameworks as a point of reference, suggesting the MAS is weighing the operational liquidity benefits of higher cash requirements against the yield opportunity costs that cash reserves impose on issuers compared to holding treasury bonds.

The requirement for exchange within five business days establishes a maximum timeframe within which issuers must meet parity exchange requirements in the pegged currency. Five business days is significantly longer than the same-day or T+1 exchange times that some stablecoin issuers are currently voluntarily offering, positioning this requirement as a legal floor to protect consumers rather than a service standard, while also giving issuers operational flexibility to manage reserve liquidation during periods of high exchange demand.

Two-tier market structure

Only issuers holding licenses to issue MAS-regulated stablecoins are permitted to market their tokens using the "MAS-regulated stablecoin" trademark in Singapore. Stablecoins that do not meet the requirements of the regulatory framework will not be banned from circulation but will remain regulated under the existing Digital Payment Tokens regulatory framework without enjoying trademark protection.

This structure creates a deliberate two-tier market: MAS-regulated stablecoins carry a legal quality signal that consumers, businesses, and institutional users can rely on when choosing payment assets, while other digital payment tokens operate under the general DPT legal framework without that signal. The commercial value of this label depends on whether Singaporean financial institutions, payment service providers, and tokenized asset platforms consider MAS-regulated status a practical requirement for integration, thereby directing institutional stablecoin activity toward licensed issuers even without mandatory legal requirements.

The amendments will also, for the first time, define both "stablecoin" and "MAS-regulated stablecoin" in the law and clarify that stablecoins remain a subset of digital payment tokens rather than a separate legal category, preserving the existing regulatory structure while adding specialized licensing within it.

Assessment and Conclusion

This proposal expands on tightening regulations across Asia, which has already accelerated significantly in 2026. Japan's Financial Services Agency established a dedicated Cryptocurrency and Stablecoin Asset Division on August 7th and is separately seeking tax declaration exemptions for trust-based stablecoins. Hong Kong has been implementing its own stablecoin licensing regime. South Korea's Digital Asset Basic Law, expected to be passed in the second half of 2026, includes bank-style licensing for stablecoin issuers with a reserve requirement of 100% or more. Vietnam is adding cryptocurrency asset services to its anti-money laundering (AML) reporting framework effective December 1st.

The convergence of these regulatory frameworks on the same core requirements—adequate reserves, redemption at face value, issuer licensing, and yield prohibition—suggests that international regulatory consensus on payment stablecoins has been largely established, with remaining differences focusing on implementation details including cash reserve ratios, redemption timeframes, capital thresholds, and foreign issuer recognition mechanisms rather than the underlying architecture.

For issuers and exchanges operating in Singapore, the practical question posed by the consultation is whether the zero-interest rule and reserve requirement are manageable compliance costs or justifications for diverting issuance through jurisdictions with different requirements—a calculation that depends on the commercial value that a MAS-managed designation brings to Singapore’s institutional market and the rigor with which MAS regulates discretionary elements of the framework that the consultation left open for industry input.

Disclaimer: The content in this article is for informational, research, data analysis, and reference purposes only regarding the cryptocurrency market. All opinions, assessments, forecasts, or opinions reflect the author's perspective at the time of publication and do not constitute investment advice, solicitations for buying or selling, trading recommendations, advertising, marketing, or promotion of any financial products, services, or cryptocurrencies. Mentions of projects, tokens, protocols, exchanges, wallets, or cryptocurrency service providers (CASPs) are for research, analysis, or informational purposes only and should not be construed as endorsements, recommendations, or guarantees in any way. HCCVenture does not broker, advertise, market, promote, or connect users in Vietnam with any cryptocurrency services from CASPs. HCCVenture does not accept asset custody, investment mandates, manage assets, or execute transactions on behalf of clients. All investment decisions are made entirely through the reader's own research (DYOR), evaluation, and responsibility; HCCVenture is not liable for any losses or damages arising from the use of or reliance on the information presented in this article.

Compiled and analyzed by HCCVenture

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