Singapore proposes banning stablecoin yield payments and mandating 100% reserve backing, joining five major financial hubs (US, EU, Hong Kong, Japan) in tightening stablecoin regulation.
DeFi & Yields ·
Singapore's Monetary Authority has proposed restrictions on stablecoin yield payments, requiring issuers to maintain 100% reserve backing at all times alongside segregated custody arrangements, stress testing protocols, and mandatory wind-down procedures. Only licensed issuers would be permitted to market their tokens as MAS-regulated stablecoins.
The proposal aligns Singapore with a growing regulatory consensus among major financial hubs. The US GENIUS Act, the EU's MiCA framework, Hong Kong, and Japan have already implemented comparable requirements, treating stablecoins primarily as payment instruments rather than investment products.
The measures address risks associated with yield-bearing stablecoins, though their implementation timeline and specific enforcement mechanisms remain to be detailed. Whether exemptions or transitional periods will apply to existing stablecoin programs is not yet specified.