Singapore would let a stablecoin issuer be nothing else

What happened

The Monetary Authority of Singapore published a consultation paper on 1 September, P015-2026, proposing legislative amendments to the Payment Services Act 2019 that would put its 2023 single-currency stablecoin framework into law; comments close on 16 October 2026 and the subsidiary legislation will be consulted on later. A new licence class of 'stablecoin issuance' would be created, and only its holders could describe a token as a 'MAS-regulated stablecoin'. The binding structural choice is at paragraph 2.10: 'issuers will not be allowed to conduct other regulated activities beyond the issuance of MAS-regulated stablecoin (e.g., issue non-MAS-regulated stablecoin, other payment services, capital market services or banking business)'. Paragraph 6.3 completes it, requiring banks and merchant banks that want to issue to 'set up a separate non-bank legal entity to issue the stablecoin', and 6.4 adds that 'banks and merchant banks may still issue tokenised deposits and MAS will be separately issuing guidance on this in due course'. Issuers would be prohibited from paying 'interest, return, or any other benefit to a holder that is directly or indirectly attributable to the holding of or balance of MAS-regulated stablecoins'. A new Part 2A would let MAS designate a stablecoin as systemic 'regardless of whether the stablecoin is issued in or outside of Singapore', require information from every issuer of a token that purports to hold a value against a reference asset, and, where a designated issuer fails MAS requirements, direct licensed intermediaries to 'delist such stablecoins and related trading pairs from their platforms'. And the 2023 bar on multi-jurisdictional issuance is reversed: MAS is 'prepared to allow stablecoins to be issued concurrently from Singapore and one or more foreign jurisdictions' and to be held out as MAS-regulated, subject to case-by-case exemption, a foreign regime it deems 'substantively equivalent', and reserves across all issuing entities worth at least 100 per cent of par at all times. Ho Hern Shin, deputy managing director for financial supervision, said the framework matters 'as asset tokenisation gains traction' because 'trusted and well-regulated stablecoins can serve as a credible settlement asset in tokenised financial markets'.

Why it matters

Two supervisors answered the same question in the same week and gave opposite answers. The OCC chartered a bank on 2 September whose plan puts tokenized capabilities across all its deposit products and a stablecoin subsidiary underneath the same holding structure, and conditioned the approval on future GENIUS Act compliance it will judge itself. MAS proposes that an issuer may do nothing but issue, that a bank wanting to issue must put it in a separate non-bank company, and that the reason is contagion: keeping the issuer out of credit intermediation is what distinguishes a payment instrument from a deposit, and the paper says so in those terms. Read with paragraph 6.4, the design is a clean split. Stablecoins are payment instruments issued by single-purpose licensees that may not lend and may not pay interest; tokenized deposits stay with banks and get their own rules. That is the distinction the Bank for International Settlements has been pressing and the first time a major supervisor has drafted it into statute. The multi-jurisdictional reversal is the other half. A framework that only recognised a wholly Singaporean issuer could never have covered the tokens actually circulating, and Singapore has chosen to regulate them rather than watch them, at the price of accepting a foreign regulator's work as substantively equivalent to its own.

What is not settled

A great deal is asked rather than proposed, and one of it has been reported the other way round. The readable portion of Ledger Insights' account says draft regulations 'would prohibit issuers from using customer monies, and the interest earned on them, to materially finance the business'. Paragraph 3.5 does the opposite: it records that 'some stablecoin-issuance business models rely on the returns earned on the reserve asset pool to finance their business activities and defray operational costs' and asks 'whether the prohibition on use of interest earned on customers' monies is required, and if so, how the restrictions should be calibrated'. That is an existing e-money rule put up for reconsideration, not a new prohibition; the article continues behind a Pro subscription, so the desk cannot say whether it goes on to make the distinction. Also open: whether to require a minimum share of reserves in cash and bank deposits, where MAS notes other jurisdictions at 5 to 30 per cent for non-systemic issuers and 40 to 60 per cent for systemic ones and asks for thresholds; whether to cap aggregate issuance or individual holdings; and whether an issuer losing its licence must wind up the company rather than merely stop issuing. No stablecoin has been designated systemic and the paper names none. MAS says it expects 'a limited number' of licences and does not say how few. CoinDesk's account, which the search index titles as reporting a 100 per cent reserve requirement and a yield ban, returned 429 to this desk and was not read.