Singapore Reconsiders Stablecoin Restrictions Amid Global Regulatory Shifts

The Monetary Authority of Singapore (MAS) is reconsidering its stance on stablecoins issued across multiple jurisdictions. The regulator has proposed amendments to implement a framework for jointly issued tokens, which could be labeled 'MAS-regulated stablecoins' if associated risks are sufficiently mitigated.

MAS opened a public consultation on the proposals, which cover legislative amendments to the Payment Services Act (PSA) and additional policy changes. The regulator is considering recognizing a limited number of foreign-issued stablecoins regulated under comparable overseas frameworks for use in cross-border wholesale transactions.

The MAS proposals revisit its 2023 position that qualifying stablecoins must be issued solely in Singapore, citing difficulties establishing regulatory equivalence and cooperation with other jurisdictions at the time. The regulator also noted technical challenges in tracing the origin of commingled stablecoins and determining whether overseas reserves would be sufficient to meet redemption requests.

MAS is seeking public comments on the proposals until October 16, which cover reserve-backed value stability, capital, redemption at par, and issuer disclosures. Only issuers licensed under the framework would be permitted to market themselves as MAS-regulated stablecoin issuers and label their tokens 'MAS-regulated stablecoins.'