MAS Consultation on Proposed Amendments to the Payment Services Act for Stablecoin Regulation

Executive Summary

On 1 September 2026, the Monetary Authority of Singapore (“MAS“) published a Consultation Paper on proposed amendments to the Payment Services Act 2019 (“PS Act“) to implement the MAS-regulated single currency stablecoin (“SCS“) framework in Singapore (“MAS-SCS framework“). This follows from MAS’ earlier consultation in October 2022 and its response in August 2023 setting out the finalised regulatory approach for stablecoin-related activities. For more details, please refer to our August 2023 Legal Update titled “MAS Announces New Regulatory Framework for Stablecoins“. The framework aims to maintain a high degree of value stability in MAS-regulated SCS, helping users distinguish them from non-MAS-regulated stablecoins. Non-MAS-regulated stablecoins will continue to fall within the scope of the Digital Payment Token (“DPT“) regime, for which intermediation services are already generally subject to regulation.

The consultation period ends on 16 October 2026. This Update highlights the key proposals in the Consultation Paper. 

Key Proposals

Definition of Stablecoin and New Licensing Framework

The Consultation Paper proposes to introduce a new licensing framework for issuers who wish to hold themselves out as issuers of “MAS-regulated stablecoins”. Under the proposed licensing framework, such issuers must hold a “stablecoin issuance licence” from MAS.

To support the new licensing framework, MAS has proposed a new “stablecoin” definition in section 2(1) of the PS Act, being any digital representation of value that:

1. is expressed as a unit;
2. its issuer maintains or purports to maintain its value by reference to a single currency or asset, or a pool or basket of currencies or assets;
3. is, or is intended to be, a medium of exchange accepted by the public, or a section of the public, as payment for goods or services or for the discharge of a debt;
4. can be transferred, stored or traded electronically; and
5. satisfies such other characteristics as MAS may prescribe,

but does not include any excluded stablecoin.

MAS has also proposed legislative amendments to clarify that stablecoins fall within the broader definition / category of “DPTs” under the PS Act, unless otherwise provided. MAS also proposed to amend the “e-money” definition to clarify that fiat-pegged stablecoins are not e-money.

Core Issuer Obligations

Under the proposed new licensing framework, issuers holding the new stablecoin issuance licence will need to comply with various ongoing conduct of business requirements, including:

1. maintaining reserve assets at least equal to the par value of stablecoins in circulation and fulfilling redemptions in the pegged currency within MAS-prescribed timeframes;
2. safeguarding customers’ funds until stablecoins are delivered; and
3. complying with anti-money laundering / combating financing of terrorism (“AML/CFT“), technology risk, consumer protection and other PS Act requirements.

Issuers will not be permitted to conduct other regulated activities, but may provide incidental DPT services for their stablecoins without a separate licence.

Additional Risk Management and Consumer Protection Requirements

MAS has also proposed to require the licensed issuers to comply with enhanced consumer protection and risk management requirements. 

The proposed enhanced consumer protection requirements include: 

1. safeguarding monies received from customers prior to stablecoin issuance or redemption fulfilment;
2. prohibition on all stablecoin issuance upon licence surrender, revocation or lapse, with potential winding down/up of the business or entity to mitigate public confusion; and
3. powers for MAS to prohibit disposal of reserve assets until there are no outstanding redemption requests. 

The proposed enhanced risk management requirements include: 

1. prohibition on paying interest on MAS-regulated stablecoins to holders;
2. prohibition on using customer money and interests to materially finance business activity;
3. potential caps on aggregate issuance or individual holdings;
4. regular stress testing (at least quarterly), with details on scope and thresholds of such stress testing to be set out in subsidiary legislation;
5. powers for MAS to impose additional liquidity and capital requirements;
6. recovery and orderly wind-down plans; and
7. technical capability to trace, freeze and/or burn stablecoins.

MAS seeks comments on the above proposed measures, as well as on proposed AML/CFT measures including verified holder identification, unhosted wallet restrictions, and ongoing circulation monitoring.

Framework for Designating and Regulating Systemic Stablecoins

MAS has also proposed a new designation framework, under which it would have powers to designate stablecoins as systemic (“Designated Systemic Stablecoin“) to prevent systemic risk or financial system disruption. Issuers of Designated Systemic Stablecoins would be required to comply with requirements similar to MAS-regulated stablecoins, failing which MAS may restrict circulation. This applies regardless of where the stablecoin is issued or whether the issuer is regulated under the MAS-SCS framework. 

To support the proposed new designation framework, MAS will require issuers of stablecoins and licensed intermediaries supporting stablecoins to provide MAS with information on stablecoins circulating in Singapore generally, including issuance/redemption data and DPT intermediary partnerships, to enable MAS to have sufficient information to determine whether a stablecoin should be designated as a systemic stablecoin. Factors for designating a stablecoin as systemic include:

1. size in circulation;
2. interconnectedness with payment systems and the broader financial system in Singapore; and
3. substitutability.

MAS has proposed for issuers of Designated Systemic Stablecoins to be required to comply with requirements in line with that applicable to MAS-regulated stablecoins, particularly in relation to reserve assets, redemption requirements, prudential requirements, and white paper issuance. Additionally, issuers of Designated Systemic Stablecoins may also be subject to enhanced requirements aligned with recommendations of the Financial Stability Board, including as to corporate governance, recovery and resolution. MAS has also proposed to have powers to restrict non-compliant systemic stablecoins.

Framework to Facilitate the Multi-Jurisdiction Issuance (“MJI”) of Stablecoins

MJI arrangements involve the issuance of the same fungible stablecoin by related or affiliated issuing entities operating in different jurisdictions, sharing the same reserve pool. While MAS had earlier in 2023 indicated that MJI would not be permitted for MAS-regulated stablecoins (given the nascent state of stablecoin regulation at the time), in light of the evolving stablecoin regulatory landscape and increasingly prevalent use cases for MJI arrangements, MAS has now proposed to grant exemptions to allow MJI arrangements for MAS-regulated stablecoins on a case-by-case basis, provided that the associated risks are sufficiently mitigated. The Singapore-incorporated issuer of the MJI stablecoin will still need to obtain a stablecoin issuance licence, and all the standard MAS-SCS requirements will apply, except:

1. the requirement for any issuer of an MAS-regulated stablecoin to be incorporated in Singapore; and
2. the requirement for the MAS-regulated issuer to hold reserve assets equal to or exceeding the value of stablecoins in circulation (allowing some reserve assets to be held by foreign co-issuers).

MAS has also proposed that it will only grant exemptions for such MJI arrangements of MAS-regulated stablecoins subject to conditional safeguards to maintain the value stability of the stablecoin and address the unique risks of MJI arrangements, including:

1. the requirement that all foreign issuers are supervised under equivalent regimes;
2. requirements as to the reserve asset composition, the amount of reserve assets held and how they are held, and the proportion held between the Singapore issuer and offshore issuer; and
3. the requirement for rights of the SCS holders to be comparable across all issuing entities (e.g. in relation to redemption fees and redemption timelines). Where there are differences in regulatory requirements across jurisdictions, the stricter standard should apply.

MAS has also proposed to require MJI arrangements to have a robust recovery plan to ensure orderly responses to stress scenarios. For such MJI arrangements, if MAS-regulated stablecoin issuers intend to exit the MAS-SCS framework while continuing to issue the stablecoins outside Singapore, they must ensure that they have no outstanding redemption requests from existing holders of the stablecoins.

Recognition of Foreign-Issued Stablecoins

MAS proposes to recognise a limited number of foreign-issued stablecoins case-by-case if they are well-regulated for value stability. Recognition will be subject to conditions similar to the safeguards proposed for regulating MJI arrangement issuers, including requiring equivalent regulation in the relevant foreign jurisdiction, and supervisory cooperation and information sharing agreements between MAS and the counterpart relevant authorities. Such stablecoins may then be held out as “recognised” foreign-issued stablecoins or a similar title to be determined. However, MAS will seek to ensure the status and concessions accorded to MAS-regulated stablecoins and “recognised” foreign-issued stablecoins are sufficiently differentiated so that consumers can clearly distinguish between the two.

Regulatory Treatment of Non-MAS-Regulated Stablecoins

The MAS-SCS framework will distinguish stablecoins backed by high-quality reserves (being the MAS-regulated stablecoins) from other crypto-assets. MAS’ general stance remains that stablecoins should be used for payments and not by the public as investments or for yield. 

Retail protections for non-MAS-regulated stablecoins

MAS is also considering requirements on licensed DPT service providers (DPTSPs) offering non-MAS-regulated stablecoins, including the following:

1. enhanced disclosures on reserve assets backing such tokens;
2. risk warnings that these DPTs are not regulated for value stability and may not maintain their promised value; and
3. restrictions on marketing such tokens as “stablecoins”.

Requirements for Banks and Merchant Banks (“MBs”) who Wish to Issue MAS-Regulated Stablecoins

MAS has also proposed to require that banks and MBs wishing to issue MAS-regulated stablecoins must set up a separate non-bank entity to do so. However, banks and MBs will continue to be able to issue tokenised deposits. MAS will issue separate guidance on this in due course, but banks and MBs intending to engage in such activity should engage MAS early before issuance.

Restrictions on MBs and Wholesale Banks (“WBs”) regarding “deposit-like” payment instruments

WBs and MBs are currently subject to SGD deposit-taking restrictions, given that they are not expected to serve retail customers. MAS has reiterated that these restrictions will similarly apply to persons who may purchase, hold or access SCS issued by WMB Entities (i.e. WBs, MBs and related issuing entities), whether acquired directly or on the secondary market. MAS has clarified that this policy position will also apply to e-money issued by WMB Entities. WMB Entities are therefore prohibited from issuing SGD SCS that can be traded freely by retail individuals, although they may issue stablecoins supporting wholesale use cases that may only be traded amongst corporates and used for trade finance. WMB Entities intending to issue SCS or e-money should again also engage MAS regarding their plans.

Key Takeaways

The amendments reflect MAS’ approach to balance innovation with financial stability and consumer protection. MAS expects to authorise or recognise only a limited number of stablecoin issuers and foreign-issued stablecoins.

For queries or to submit feedback, please reach out to our team set out on this page.

For regional Financial Institutions matters, please see Rajah & Tann Asia’s Financial Services Regulatory Practice Group for more information.