Singapore Proposes Stablecoin License with Full Reserves Requirement
Singapore's Monetary Authority (MAS) has proposed a new stablecoin issuance license that requires issuers to maintain full reserves, effectively banning issuer-funded interest and benefits tied directly to customer holdings. The proposal aims to bring stability to the market by maintaining a clear regulatory framework for single-currency stablecoins issued in Singapore.
The MAS will require licensed issuers to hold reserve assets equal to or exceeding the outstanding tokens at all times. This includes supporting redemption at par, capital, disclosure, and reserve management requirements. The regulator is also considering a route for foreign-issued stablecoins that meet comparable regulatory safeguards, but recognition would not be automatic.
The proposed framework maintains a five-business-day deadline for direct redemption requests and prohibits issuers from paying interest or providing benefits tied directly to holding an MAS-regulated stablecoin. This move aims to preserve the tokens' intended role as payment and settlement instruments rather than deposit or investment products.
Industry participants have until October 16 to comment on the legislative amendments and related policy measures. The MAS will then review submissions before finalizing the bill and subsidiary requirements.