Singapore proposes dedicated stablecoin license under Payment Services Act
DeFi & Yields ·
The Monetary Authority of Singapore has opened public consultation on amendments that would create a distinct licensing category for stablecoin issuers, with feedback due by October 16.
The proposal, detailed in a consultation paper published by MAS, would require stablecoin issuers to maintain 100% reserve backing, allow holders to redeem tokens at par value, and submit to quarterly stress tests. The framework would also bar issuers from paying interest on stablecoin holdings, a restriction that separates the proposed regime from interest-bearing deposit products regulated elsewhere in Singapore's financial system.
The move extends the Payment Services Act, the law MAS already uses to license digital payment token services such as exchanges and custodians under Major Payment Institution or Standard Payment Institution tiers. A dedicated stablecoin license would formalize a category that has so far operated under broader digital-asset rules, giving MAS explicit tools to supervise issuance, reserves, and redemption mechanics rather than treating stablecoins as one variant among other payment tokens.
The timing lines up with a broader global push on stablecoin oversight. Bloomberg reported that Singapore is advancing its rules as stablecoin adoption accelerates worldwide, and coverage from wublockchain.xyz similarly frames the proposal as part of Singapore's move toward comprehensive stablecoin regulation with stricter oversight than the country's existing digital-asset licensing tiers. At least four distinct sources are tracking the consultation, according to the cluster of coverage around the announcement.
The proposal follows a pattern of MAS applying scrutiny unevenly but consistently across the sector: the regulator has previously revoked a payment firm's license over what it called serious breaches, and it has placed unlicensed platforms on its investor alert list. Those actions, paired with the new stablecoin consultation, reinforce a regulatory posture that treats digital assets as licensable and supervisable rather than prohibited outright.
What remains unresolved is how MAS will finalize the reserve, redemption, and stress-test requirements after the consultation period closes, and whether existing stablecoin-linked activity in Singapore — including bank-backed and exchange-linked USD-pegged products — will need to restructure to fit the new license category. The October 16 deadline sets the next concrete checkpoint, after which MAS is expected to weigh industry feedback before drafting final amendments to the Payment Services Act.