Singapore may allow foreign-regulated stablecoins under updated MAS rules

Singapore’s central bank is considering allowing some foreign-issued stablecoins to operate under its regulatory framework, marking a shift from its earlier stance that only domestically issued tokens would qualify.

A stablecoin is a type of cryptocurrency designed to hold a steady value, often pegged to a traditional currency like the US dollar.

The Monetary Authority of Singapore (MAS) opened a public consultation on Tuesday to gather feedback on proposed changes, including a route for jointly issued stablecoins to be labeled as “MAS-regulated stablecoins” if risks are properly managed.

Proposed changes to stablecoin rules

MAS is also considering recognizing a limited number of foreign-issued stablecoins that are regulated under comparable overseas frameworks. These could be used in cross-border wholesale transactions.

The move revisits MAS’s 2023 decision, which restricted qualifying stablecoins to those issued solely in Singapore. At the time, the regulator cited challenges in establishing regulatory equivalence with other jurisdictions and technical difficulties in tracking the origin of commingled stablecoins.

New safeguards for issuers

The consultation includes plans to implement the 2023 stablecoin framework through amendments to the Payment Services Act, Singapore’s primary law governing payment services.

Proposed requirements cover reserve-backed value stability, capital, redemption at par, and issuer disclosures. Only licensed issuers would be allowed to market themselves as MAS-regulated stablecoin issuers.

Additional safeguards include prohibiting issuers from paying interest on regulated stablecoins, requiring stress tests, and mandating recovery and wind-down plans. Issuers would also need to protect customer funds received before stablecoins are issued.

Stablecoins outside the new framework would continue to be treated as digital payment tokens under existing rules.

Public feedback and next steps

MAS is accepting public comments on the proposals until October 16, 2026.

Sources

• Cointelegraph