Singapore’s central bank is opening a new front in stablecoin oversight, proposing a licensing regime that would force issuers to hold 100% reserves and ban interest payments to coin holders. The Monetary Authority of Singapore (MAS) detailed the draft framework in a new stablecoin licensing proposal, framing the rules as a way to reduce risk in a fast-growing market.
What the MAS stablecoin license would require
The proposal would require licensed stablecoin issuers to back all tokens in circulation with high-quality reserve assets, rather than relying on fractional or riskier collateral. It also would prevent issuers from paying interest or other yield to stablecoin holders, a design choice meant to keep stablecoins as a payments-focused instrument and limit regulatory arbitrage. The approach echoes other jurisdictions trying to define safe stablecoin rails, including the U.S. Treasury Proposes GENIUS Act Rules for Stablecoin Issuers and Foreign Stablecoins.
The 100% reserve requirement would apply to Singapore-dollar and other single-currency stablecoins, with issuers expected to maintain liquid assets and meet redemption obligations at par. MAS has also emphasized transparency around reserve composition and audit requirements, while leaving room for future refinements as the regime is finalized. These measures are part of a broader industry shift toward using stablecoins as regulated settlement tools, a theme examined in LMAX: Stablecoins and Tokenization Are Fixing Crypto’s Settlement Bottleneck.
What to watch for issuers, exchanges and global policy
If the proposal is adopted, stablecoin issuers operating in Singapore may need to restructure reserve custody and discontinue any yield-like features offered to users. Exchanges and payment providers could face new due diligence and listing expectations, while foreign issuers may need local authorization to serve Singapore-based users. Market participants will be watching whether MAS aligns its final rules with other major frameworks, especially as stablecoin use continues to expand across payments, DeFi, and institutional settlement.
