The Monetary Authority of Singapore has launched a public consultation on proposed legislative amendments to the Payment Services Act 2019 to implement its regulatory framework for stablecoins in Singapore. According to reports from crypto.news and The Business Times, the framework would allow qualifying jointly issued foreign and Singapore stablecoins to receive the MAS regulated designation, with the regulator considering recognition for a limited number of foreign stablecoins governed by comparable overseas regulatory frameworks. The proposals extend work that began in October 2022, when MAS first consulted on rules for single-currency stablecoins, and were published on September 1 with responses due by October 16. Only licensed entities can label tokens as MAS-regulated stablecoins under the Payment Services Act amendments, with the framework mandating that only entities holding this specific license will be authorized to market their digital assets as "MAS-regulated stablecoins."
Under the proposed framework, licensed stablecoin issuers must maintain reserve assets covering at least 100% of their outstanding tokens at all times, with assets segregated from other accounts and valued daily. As reported by crypto.news, MAS's previously finalized policy requires reserves to equal or exceed the stablecoins in circulation, with eligible assets being liquid and carrying low credit and market risks. Issuers would also face minimum net tangible assets of $1 million or greater than 50% of the previous year's total revenue, whichever is higher. The framework covers single-currency stablecoins issued in Singapore and pegged to the Singapore dollar or a Group of Ten currency, with qualifying tokens using reserve assets intended to maintain stable value during normal and stressed market conditions. To ensure robust consumer protection and financial stability, the regulator mandates that issuers maintain a minimum of 100% reserve backing in high-quality liquid assets.
The new regulatory environment will move reserve quality rather than just reserve quantity to the forefront of stablecoin competition, creating distinct advantages for different issuers. As reported by AMBCrypto, the U.S. dollar-pegged USD Coin has already maintained reserves similar to Singapore's proposed structure, being almost exclusively held in cash, U.S. Treasury securities, and Treasury repos. Tether also holds its reserves at over 100% levels, while Bitcoin, gold, and other investments create broader compliance differences for each issuer. Issuers with simpler, highly liquid reserves could adapt faster, while those requiring changes in holdings may need longer to transition and potentially adjust their redemption processes before qualifying under the new regime. The stricter framework establishes qualified stablecoin issuers face stricter standards compared to MAS's existing digital payment token framework, potentially increasing barriers to entry for issuers seeking Singapore's regulatory stamp.
One of the main proposals would allow a stablecoin jointly issued by a Singapore entity and a foreign issuer to qualify as an MAS-regulated stablecoin, provided risks linked to issuing the token across different jurisdictions are sufficiently addressed. As reported by crypto.news and The Business Times, MAS is seeking views on how such multi-jurisdiction arrangements should operate under the framework. The regulator is considering a separate route for a limited number of stablecoins issued entirely outside Singapore, with foreign tokens potentially recognized when they are supervised under a regulatory framework that MAS considers comparable to Singapore's regime. Recognition would focus on cross-border wholesale uses, with MAS identifying cross-border wholesale payments as one area where recognition could be useful. Stablecoins that are not regulated under the framework will continue to be treated as digital payment tokens and subject to existing consumer protection requirements.
The legislative consultation comes as regulated stablecoins are being tested in payment and settlement projects involving financial institutions operating in Singapore. On August 25, Visa joined the MAS-led BLOOM initiative and selected Nium for a stablecoin settlement pilot involving regulated U.S. dollar and euro-backed tokens. The companies plan to test settlement seven days a week, including weekends and public holidays, across cross-border payment flows. MAS introduced BLOOM in 2025 to develop settlement arrangements using tokenized bank liabilities and regulated stablecoins, with participants including Circle, DBS, OCBC, Partior, Stripe and UOB. The market test begins once compliant stablecoins compete for actual users and liquidity, with XSGD entering with roughly $12 million circulating, far behind USDT and USDC. The MAS-regulatory stamp of approval on eligible local tokens could attract exchanges, businesses, and users looking for stablecoins operating within a clearly defined set of safeguards, though USDT and USDC already command deeper liquidity, broader integrations, and stronger global network effects.
