Singapore Tightens Stablecoin Rules with 100% Reserve Requirement
The Monetary Authority of Singapore (MAS) has proposed new regulations for stablecoins, aiming to provide clearer rules and protection for users. The plan would allow compliant stablecoins a more defined role in digital finance, while issuers that fail to meet the requirements would be treated as Digital Payment Tokens.
The proposal includes a 100% reserve requirement, where issuers must hold reserves equal to or exceeding the amount of stablecoins in circulation. Users must also be able to redeem their tokens for the same amount of fiat currency within five business days.
A major restriction is that issuers would not be allowed to pay interest or yield-like benefits to holders of MAS-regulated stablecoins, keeping them focused on payments and transactions rather than savings or investment products. This move is intended to prevent users from treating stablecoins as a means to earn returns.
The proposal also covers international use, allowing Singapore-issued stablecoins and foreign companies that meet certain conditions to qualify under the framework. The MAS aims to provide 'clear regulatory guardrails' for stablecoins, ensuring they meet high standards of value stability and governance.