SINGAPORE — The Monetary Authority of Singapore published a consultation paper Monday setting out proposed changes to the Payment Services Act that would require stablecoin issuers to maintain reserves equal to at least 100 percent of outstanding tokens, redeem holdings within five business days, and permanently prohibit paying interest or yields to holders.
The proposals, open for public comment until October 16, would convert what has been an informal and fragmented oversight environment for digital payment tokens into a formal licensing regime with the force of statute behind it. For stablecoin issuers who have operated in Singapore’s current framework — set out in a policy position MAS finalized in August 2023 without accompanying legislation — the consultation paper is the first step toward a binding legal structure.
“The proposed legislative amendments will give effect to a stablecoin framework that promotes responsible financial innovation,” MAS’s deputy managing director for financial supervision said in a statement accompanying the paper. “They will provide clear regulatory guardrails for stablecoins that meet high standards of value stability and governance.”
The reserve and redemption requirements mirror the core architecture of the US GENIUS Act, signed into law earlier this year, which similarly requires full reserve backing and prohibits stablecoin issuers from paying yield. The GENIUS Act established the first federal US stablecoin licensing framework after years of congressional stalemate, and its enactment accelerated pressure on regulators in other financial centres to act. The EU’s Markets in Crypto-Assets regulation imposes the same interest prohibition, and Hong Kong’s regime bans interest payments on holdings — placing Singapore’s proposals in direct alignment with what has become an international standard rather than a local experiment.
Where Singapore’s framework introduces a new element is in its treatment of foreign issuers. The current arrangement limits the MAS-regulated designation to stablecoins issued by Singapore-based entities. The proposed amendments would allow two new categories: jointly issued tokens, where a Singapore-licensed issuer and a foreign partner each take on regulated responsibilities, and a narrow class of purely foreign-issued stablecoins from jurisdictions with comparable regulatory frameworks. MAS has not specified which jurisdictions or issuers would qualify under the foreign-recognition pathway — and that detail is the operative question for the market’s two dominant players.
Tether’s USDT held $189.5 billion in outstanding supply as of May 2026. Circle’s USDC stood at $78.8 billion. Neither is currently eligible for the MAS-regulated designation, and neither has indicated whether it intends to pursue the jointly-issued pathway the new proposal would open.
The yield prohibition sits at the center of a recurring industry argument. Circle and similar issuers have moved in recent years toward revenue models that pass a portion of the interest earned on reserve assets back to holders or to institutional partners. The US-UK stablecoin regulatory roadmap published in July explicitly flagged yield-bearing structures as an area requiring treatment separate from pure payment stablecoins, anticipating that regulators would bifurcate the market. Singapore’s proposed ban does exactly that bifurcation: a stablecoin with a yield component is, in MAS’s reading, an investment product rather than a payment instrument, and the Payment Services Act is not the right vehicle for investment products.
The proposed safeguards extend beyond reserves and interest. MAS has proposed mandatory stress testing, recovery plans, and orderly wind-down requirements for regulated issuers — provisions that reflect lessons drawn from the 2022 Terra-Luna collapse and the subsequent rewriting of supervisory expectations globally. MiCA’s enforcement deadline in July saw more than 80 percent of EU crypto firms fail to obtain licences on time, a warning that even well-telegraphed regulatory transitions carry significant compliance burdens.
The consultation paper does not set an implementation date. MAS will review submissions received by October 16, then move to finalize the legislative amendments, according to the consultation paper. The process has no announced completion date. A stablecoin bill that clears the Singapore parliament would give the MAS-regulated designation statutory weight it currently lacks, but the timeline from consultation close to enacted legislation in Singapore has historically run between six and eighteen months — a window that puts formal licensing well into 2027 even if the October deadline is met without significant revision.
What the September 1 paper establishes, regardless of timing, is that Singapore has resolved its core regulatory question. The stablecoin is a payment instrument, not a savings product, and it will be regulated accordingly.
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