Singapore Tightens Stablecoin Rules with 100% Reserve Requirement

The Monetary Authority of Singapore (MAS) has proposed new licensing rules for stablecoins. The plan aims to provide clear regulatory guidelines for stablecoin issuers and users, while also preventing them from operating like traditional banking products.

Under the proposed framework, only licensed issuers can call their tokens 'MAS-regulated stablecoins'. These tokens must be tied to the Singapore dollar or a G10 currency, such as the U.S. dollar or euro. Issuers must hold reserves equal to 100% of the stablecoins in circulation using safe and liquid assets.

Users must also be able to redeem their tokens for fiat currency within five business days. Stablecoins that do not meet these rules will be treated as Digital Payment Tokens (DPTs), like other cryptocurrencies.

The proposal also includes a ban on paying interest or yield-like benefits to holders of MAS-regulated stablecoins, which aims to keep them focused on payments and transactions.