ChainCatcher report: The Monetary Authority of Singapore (MAS) has proposed amendments to the Payment Services Act requiring stablecoin issuers to maintain reserves at least equal to 100% of the circulating tokens, with reserves segregated from the issuer’s own funds and held exclusively with licensed financial institutions. The proposal also prohibits issuers from paying interest or any other returns tied to stablecoin holdings, on the grounds that stablecoins are intended for payments, not investment or yield generation. This stance aligns with the U.S. GENIUS Act and the EU’s MiCA regulation. The consultation also considers limited recognition for a select number of foreign stablecoins regulated under equivalent overseas frameworks. The consultation period ends on October 16, and no implementation date has been announced yet. MAS Deputy Managing Director Ho Hern Shin stated that trusted and well-regulated stablecoins can serve as credible settlement assets in tokenized financial markets while reducing risks for users and the broader financial system.
Singapore MAS Proposes 100% Reserve Requirement for Stablecoins and Bans Yield Payments
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Summary
Singapore’s MAS has proposed a 100% reserve requirement for stablecoins, aligning with global CFT standards. Issuers must hold reserves at licensed institutions, segregated from their own funds. The proposal also prohibits yield payments on stablecoins, reinforcing their role in payments rather than investment. The measure mirrors liquidity and crypto market regulations in the U.S. and EU. The consultation period ends on October 16, with no implementation date yet set.
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