Singapore seeks stablecoin licence with 100% reserves

The Monetary Authority of Singapore (MAS), the central bank and financial regulator of Singapore, is proposing amendments to the Payment Services Act of 2019. The aim is to introduce a separate licensing regime for stablecoin issuers. Only licensed parties will henceforth be allowed to label their tokens as ‘MAS-regulated stablecoin’. The public consultation runs from 1 September to 16 October 2026.

In short:

• MAS is introducing a separate licence for stablecoin issuers, with 100% reserve backing as a requirement.
• Issuers may not pay out interest or other benefits to holders of stablecoins.
• Quarterly stress tests and the ability to freeze or destroy tokens are being made mandatory.

Full reserve backing and no interest for holders

According to the MAS consultation document, licensed issuers must at all times hold reserves of at least 100% of the outstanding value. In addition, strict deadlines apply within which holders must be able to redeem their stablecoins.

A striking element of the proposal is the ban on paying out interest or other financial benefits to holders. This clearly distinguishes stablecoins from savings products and other interest-bearing instruments. The measure ties in with a broader debate about the potential risks of stablecoins to the banking system.

Stress tests and authority to freeze tokens

MAS also proposes that issuers conduct stress tests every quarter to demonstrate their financial resilience. Furthermore, they must be technically able to trace, freeze or permanently remove tokens from circulation when they are linked to criminal activities.

For stablecoins that are designated as systemically important and do not comply with the rules, MAS may restrict their circulation. This could even lead to mandatory removal from trading platforms that fall under the Payment Services Act.

Singapore closely follows international regulation

The proposals build on an initial consultation round that MAS held in October 2022. Since then, stablecoins have grown strongly internationally, partly due to attention from major issuers. For example, the CEO of Tether recently stated that stablecoins could make US government debt more stable.

Singapore is not the only country working on stablecoin regulation. Vietnam is also enforcing new crypto rules from September, although licensed parties are still lacking there for now. Responses to the Singaporean proposal can be submitted until 16 October 2026.