Singapore Opens Door to Foreign Stablecoin Partnerships

The Monetary Authority of Singapore (MAS) is revisiting its stance on stablecoins issued in foreign jurisdictions. In a public consultation, MAS proposes to allow certain stablecoins jointly issued by a Singapore issuer and a foreign partner to be recognized under the Payment Services Act (PSA). The move aims to mitigate risks associated with regulatory equivalence and tracing commingled reserves.

The original 2023 framework required stablecoins to be issued solely in Singapore, citing concerns around regulatory equivalence and technical issues related to tracing commingled stablecoins. However, MAS is now seeking input on approaches that could reduce these barriers while maintaining the core objective of regulated redemption and reserve-backed stability.

Under the proposed amendments, issuers would need to meet specific requirements, including reserve-backed value stability, capital arrangements, and redemption mechanisms at par. The regulator also proposes additional controls focusing on resilience and governance, such as stress testing and recovery plans.