Singapore's MAS proposes new stablecoin license requiring 100% reserves, no interest payments, and quarterly stress tests.
DeFi & Yields ·
Singapore's Monetary Authority has proposed amendments to the Payment Services Act that would establish a dedicated license category for stablecoin issuers. Under the framework, only licensed operators may market their tokens as "MAS-regulated stablecoins." The proposal mandates that issuers maintain at least 100% reserve backing, honor redemption requests within specified timeframes, and prohibit interest payments or other benefits tied to stablecoin holdings.
The regulatory design includes quarterly stress testing requirements and enforcement mechanisms allowing authorities to trace, freeze, or burn tokens associated with illegal activity. Stablecoins designated as systemically important face the risk of circulation restrictions and potential delisting from licensed digital-payment-token providers if they fail to meet regulatory standards.
The timeline for implementation and any transition provisions for existing stablecoin issuers remain unspecified in the proposal. The extent to which this framework will influence other jurisdictions' stablecoin regulation is also unclear.