MAS Proposes New Stablecoin Rules for Foreign Issuers

The Monetary Authority of Singapore (MAS) has proposed new rules for stablecoins issued by foreign entities, as well as interest payments and issuer wind-down plans. The proposed amendments to the Payment Services Act 2019 would put the country's stablecoin framework into law, allowing qualifying jointly issued foreign and Singapore stablecoins to receive the MAS-regulated designation.

The framework would also consider recognition for a limited number of foreign stablecoins governed by comparable overseas regulatory frameworks, focusing on cross-border wholesale uses. This move is aimed at extending work that began in October 2022, when MAS first consulted on rules for single-currency stablecoins.

Proposed safeguards for issuers seeking the MAS-regulated designation include a prohibition on paying interest on regulated stablecoins, stress testing, and requirements for recovery and an orderly wind-down if their businesses encounter financial or operational problems. Issuers would also need to comply with standards covering value stability, capital, redemption at par, and disclosures to users.

Public feedback on the proposed amendments and related stablecoin policies is open until October 16.