Singapore Tightens Stablecoin Rules with 100% Reserve Requirement

Singapore's financial regulator has proposed stricter rules for stablecoin issuers. According to the Monetary Authority of Singapore (MAS), issuers would be required to hold reserves equal to at least 100% of tokens in circulation and are barred from paying interest or other returns to holders.

The MAS also stated that stablecoins must be redeemable at par value, with reserves segregated from issuers' own funds and held with licensed financial institutions. This approach reinforces Singapore's view of regulated stablecoins primarily as payment instruments rather than investment products.

MAS Deputy Managing Director (Financial Supervision) Ms Ho Hern Shin said the proposed framework aims to promote responsible financial innovation and provide clear regulatory guardrails for stablecoins that meet high standards of value stability and governance.

The proposals would apply to stablecoins pegged to the Singapore dollar or G10 currencies, bringing Singapore's framework closer to emerging regulatory standards in the United States and European Union. The MAS is also proposing a pathway for recognising foreign stablecoins operating under comparable regulatory regimes.