Singapore is proposing tougher rules for stablecoin issuers, including a requirement for reserves to fully back the tokens and restrictions on issuers using reserve assets to generate or distribute yield.
The Monetary Authority of Singapore (MAS) published a consultation paper on September 1 proposing amendments to the Payment Services Act to expand and strengthen the country’s stablecoin regulatory framework.
The proposed changes would cover multi-jurisdictional stablecoins and certain foreign-issued stablecoins, bringing them within a regulatory framework designed to protect users and maintain confidence in the value of the tokens.
100% reserve backing proposed
Under the proposed framework, stablecoin issuers would need to maintain reserve assets sufficient to cover the outstanding value of their stablecoins.
The reserve requirements are intended to ensure that holders can redeem their tokens and that the stablecoins maintain a high degree of value stability.
MAS has also proposed rules governing how issuers can manage and use the assets backing their tokens.
One of the most significant changes concerns yield.
MAS is seeking feedback on proposals that would prevent issuers from offering holders interest or other forms of yield simply for holding their stablecoins.
The regulator’s approach reflects its position that regulated stablecoins should primarily function as payment and settlement instruments rather than investment products.This distinction is becoming increasingly important as stablecoin issuers look for ways to attract users beyond payments.
If adopted, Singapore’s rules would make it harder for issuers operating under its framework to compete for users through yield-based incentives.
Foreign stablecoins face new requirements
The proposed amendments would also establish how certain foreign-issued and multi-jurisdictional stablecoins can qualify for recognition under Singapore’s framework.
MAS wants issuers to meet regulatory standards that support the stability and integrity of their tokens, even when the issuer operates across multiple jurisdictions.
The regulator said the framework is intended to provide clear safeguards while allowing regulated stablecoins to support digital payments and tokenised financial markets.
Singapore introduced its existing stablecoin framework in 2023, requiring issuers of MAS-regulated stablecoins to meet requirements covering reserve assets, capital, redemption and disclosure.
The latest proposals would build on that framework rather than replace it entirely.
Singapore wants stablecoins tied to real financial activity
MAS has also linked regulated stablecoins to the development of tokenised financial markets.Stablecoins could serve as settlement assets in transactions involving tokenised securities, allowing the payment leg of a transaction to occur alongside the transfer of the underlying asset.
This is part of a wider effort by Singapore to develop regulated digital-asset infrastructure while keeping financial stability and consumer protection at the centre of its approach.
MAS is now seeking public feedback on the proposed amendments. The consultation is scheduled to close on October 16, 2026.The proposals are not yet final rules. Any new requirements will depend on the outcome of the consultation and subsequent legislative changes.
For stablecoin issuers, however, the direction is clear: access to Singapore’s regulated market is likely to come with stricter reserve, redemption and governance requirements.