Singapore’s central bank has proposed new rules that would ban interest payments on stablecoins regulated in the city-state and require issuers to meet tougher risk and consumer-protection standards. The consultation, published on Sept. 1, also explores pathways for jointly issued stablecoins and certain foreign-regulated stablecoins to operate under Singapore’s framework.
MAS Proposes Interest Ban on Regulated Stablecoins
The Monetary Authority of Singapore (MAS) outlined legislative changes that would prohibit interest or yield payments on stablecoins regulated by MAS. The move targets products marketed as offering returns on stablecoin holdings, aligning them more closely with payment-focused digital tokens rather than investment products.
Stronger Risk Management and Consumer Safeguards
- Mandatory stress testing to demonstrate resilience under adverse market conditions.
- Recovery and wind-down plans to ensure orderly handling of severe disruptions.
- Enhanced customer safeguards, including clearer disclosures and protections for user funds.
MAS said the measures are designed to strengthen the stability and reliability of regulated stablecoins used in payments and digital asset markets.
Pathways for Jointly Issued and Foreign-Regulated Tokens
The consultation opens potential avenues for jointly issued stablecoins and selected foreign-regulated stablecoins to be recognized within Singapore’s regime. Details on eligibility, supervisory coordination, and compliance requirements would be set out through the consultation and subsequent rulemaking.
Context and Next Steps
Stablecoins are crypto tokens designed to maintain a stable value, typically pegged to fiat currencies, and are widely used in payments, trading, and settlement. Singapore has sought to build a comprehensive framework to support their safe use while mitigating risks to consumers and financial stability.
MAS is seeking industry and public feedback on the proposals. Further guidance, including implementation timelines and transitional arrangements, is expected following the consultation process.