MAS Proposes Stricter Stablecoin Regulations in Singapore

The Monetary Authority of Singapore (MAS) has proposed new regulations for stablecoin issuance in the country. According to a recent consultation paper, MAS is seeking feedback on a proposal that would create a dedicated stablecoin issuance license, requiring issuers to hold reserve assets at least equal to the par value of every token in circulation.

The proposed rules also introduce a new 'Designated Systemic Stablecoin' framework that would allow the regulator to restrict or suspend circulation of stablecoins judged to pose systemic risks. Issuers would be prohibited from paying interest or other benefits to holders, and would have to maintain reserve assets at 100% of outstanding stablecoins.

MAS is also seeking views on requiring a minimum share of reserves to be held in cash or bank deposits. The regulator has proposed that issuers should run regular stress tests and would gain powers to impose additional liquidity and risk-based capital requirements if those tests reveal vulnerabilities.