MAS consults on implementation of Singapore stablecoin regime

Introduction

On 1 September 2026, the Monetary Authority of Singapore (MAS) announced the publication of a consultation paper proposing legislative amendments to the Payment Services Act 2019 (PS Act) to introduce:

1. a new licensing regime for Singapore-incorporated issuers of single currency stablecoins (SCS) pegged to the Singapore dollar or any G10 currency;
2. a recognition regime for foreign issuers of equivalent SCS who are subject to adequate regulatory oversight in their home jurisdictions; and
3. powers for the MAS to designate stablecoins which are systemic and may pose risks to or disrupt Singapore’s financial system.

Interested parties are to provide feedback to the MAS by 16 October 2026.

SCS regulatory framework

The MAS announced the core features of the SCS regulatory framework back in August 2023 (2023 Announcement). The proposed legislative update issued this week is aligned with the 2023 Announcement, with key regulatory requirements for licensed SCS issuers including:

1. maintenance of reserve assets with a value at least equal to the par value of all SCS in circulation. Further:
   1. reserve assets are to comprise cash, cash equivalents (e.g., bank deposits), or short-term debt securities meeting minimum credit ratings, with SCS issuers maintaining a risk management policy covering credit, liquidity, and concentration risks; and
   2. reserve assets are to be held in segregated accounts held by financial institutions licensed to provide custodial services, including overseas-based custodians with a licensed branch in Singapore;
2. return of the par value of SCS to holders within five business days of receiving a redemption request;
3. restrictions on other business activities carried out by the SCS issuer; and
4. a minimum base capital set at the higher of SGD 1 million or 50% of the SCS issuer’s annual operating expenses, and liquid assets at the higher of 50% of annual operating expenses or an amount required to achieve recovery or orderly wind-down.

Please refer to our earlier client alert setting out the details of the 2023 Announcement.

Additional conduct requirements for issuers of SCS

The MAS has also taken into account further developments in global stablecoin regulation since the 2023 Announcement and proposes to introduce additional requirements, including:

1. a prohibition against paying interest on SCS, lending money received from customers in exchange for SCS, or representing that the SCS is associated with a Singapore-incorporated bank;
2. a prohibition on SCS issuers acquiring any stake in any entity (subject to limited exceptions) without prior approval of the MAS;
3. a requirement for SCS issuers to safeguard money:
   1. received from a customer, prior to the customer receiving the SCS; or
   2. to be paid to a customer for SCS redemption, which the customer has not yet received;
4. a requirement for SCS issuers to disclose information to the public relating to their operations and activities, including their policies and procedures to maintain the SCS’ peg and reserve asset pool, and the terms and conditions imposed on holders of the SCS;
5. a requirement for SCS issuers whose licence has been revoked, has lapsed, or has been surrendered to:
   1. be disallowed from conducting all issuance business, including that relating to stablecoins outside the SCS framework; or
   2. wind down their business and/or wind up the issuing entity;
6. a requirement for SCS issuers whose licence has been revoked, has lapsed, or has been surrendered to support orderly redemption of SCS prior to winding up;
7. a requirement for SCS issuers to implement risk management frameworks addressing operational risks (e.g., fraud and cyber risks), compliance risks (e.g., money laundering and terrorism financing risks), and financial stability risks. These will also include policies and procedures for:
   1. stress testing of reserve assets and redemption mechanisms;
   2. recovery and orderly wind-down plans; and
   3. technical capabilities to trace, freeze, or burn SCS used in illicit activities.

Other requirements which the MAS is deliberating and is seeking public feedback on include:

1. the extent to which SCS issuers are allowed to use the reserve asset pool to earn interest or returns to finance their business activities and defray operational costs;
2. whether a minimum proportion of reserve assets should be held in cash or bank deposits to mitigate liquidity risks;
3. whether SCS issuers should be subject to aggregate caps on the total amount of SCS issued; and
4. whether customers should be subject to limits on the value of SCS they may hold.

Multi-jurisdictional issuance of SCS

The MAS initially stated as part of the 2023 Announcement that multi-jurisdictional issuance of SCS would not be permitted under the regulatory framework, but has since changed its stance as other jurisdictions have begun regulating stablecoin issuance and use cases for multi-jurisdictional issuance of SCS have become more prevalent.

Issuers of SCS under such multi-jurisdictional arrangements will still be required to apply for a stablecoin issuance licence, but will be permitted to:

1. issue SCS through both a Singapore-incorporated issuer (which will be the licensed entity) and one or more foreign co-issuers;
2. hold some reserve assets through foreign co-issuers rather than through the Singapore-incorporated issuer, such that the latter may not be required to hold an amount of reserve assets equal to or exceeding the value of all SCS issued.

These permissions will be granted on a case-by-case basis as exemptions from conduct requirements which would otherwise restrict these business models. In deciding whether to grant such exemptions, the MAS proposes the following safeguards:

1. foreign co-issuers must be supervised under a stablecoin regulatory regime which the MAS deems to be substantially equivalent to the SCS framework; a key factor would be the presence of bilateral agreements between the MAS and the foreign supervisory authority to facilitate information sharing and supervisory cooperation;
2. the composition of reserve assets held by all issuing entities must meet the stricter of the requirements under either the SCS framework or the foreign regulatory regime. The Singapore-incorporated issuer must hold a risk-proportionate amount of reserve assets and demonstrate to the MAS its ability to mitigate the risks of reserve assets being held across jurisdictions (e.g., reserve rebalancing arrangements or stablecoin attribution models, which must be approved by the MAS);
3. the rights of all SCS holders (e.g., redemption fees and timelines) should be comparable across all issuing entities, with all issuers meeting the stricter of the regulatory requirements across jurisdictions.

The MAS is also considering whether to require a Singapore-incorporated issuer in a multi-jurisdictional issuance to be wound up upon the revocation, lapse, or suspension of the licence, especially if the SCS issuance business in the other jurisdictions is continuing, or where a mandatory winding-up requirement may not be feasible.

Recognition regime for foreign issuers

The MAS also proposes to introduce a recognition regime to distinguish between stablecoins which are completely unregulated and those which are well regulated under a foreign regime. A foreign issuer must make an application to the MAS for recognition, with the MAS granting this status only on a limited and case-by-case basis.

The MAS will impose conditions on such recognition, including:

1. the requirement for the stablecoin to be regulated under a stablecoin regulatory regime which the MAS deems to be substantially equivalent to the SCS framework;
2. the presence of bilateral agreements between the MAS and the foreign supervisory authority to facilitate information sharing and supervisory cooperation;
3. the scope of activities which the foreign issuer is permitted to undertake and the minimum financial requirements to be maintained; and
4. ongoing information and notification requirements.

Designation regime for systemic stablecoins

To complement the SCS regulatory regime, the MAS also proposes to introduce powers to designate stablecoins as systemic and require their issuers to comply with key requirements in line with those imposed on SCS issuers, such as on the composition, valuation, and custody of reserve assets, redemption requirements, prudential requirements, and recovery and resolution planning. The MAS may restrict the circulation of designated stablecoins issued by non-compliant issuers, including by prohibiting digital payment token service providers from circulating the non-compliant stablecoin.

The designation regime will apply regardless of whether the stablecoin is issued in or outside of Singapore, or whether the stablecoin and its issuers are regulated under the SCS framework. The MAS’ powers are triggered where the designation is necessary to prevent systemic risk events or systemic disruption to Singapore’s financial system or is otherwise in the interests of the public.

Factors which the MAS will take into account in determining whether a stablecoin is systemic include:

1. the value of stablecoins in circulation (including the proportion circulating in Singapore versus globally);
2. how widely a stablecoin is integrated and used domestically and globally for payments (e.g., the extent of use in payments for goods and services in Singapore, and the number of merchants or payment systems accepting the stablecoin);
3. the extent to which the stablecoin is used in the broader financial system (e.g., settlement of capital markets products or trade finance, or cross-border settlement); and
4. the substitutability of the stablecoin (i.e., if the stablecoin has a specific use case for which there are limited alternatives, its failure could potentially be disruptive).

Conclusion

The three-year gap between the 2023 Announcement and the current proposal to amend the PS Act reflects the pace of change in global stablecoin regulation, with the MAS adopting a patient approach to learning from best practices overseas. This is timely given the commencement of Hong Kong’s stablecoin regulatory regime in August 2025, with Hong Kong Monetary Authority subsequently granting inaugural stablecoin issuer licences to two entities in April 2026.

Please refer to our earlier client alert for a discussion of Hong Kong’s stablecoin regime.

With the MAS accommodating multi-jurisdictional issuance models in the licensing regime and introducing a recognition regime for foreign issuers, prospective players would do well to commence discussions with the MAS early and apply for licences in well-regulated jurisdictions to bolster their standing with the MAS once the SCS regulatory regime is fully in force. Seizing a first-mover advantage is imperative given that the MAS is expected to issue only a small number of licences and grant recognition on a limited basis.

If you wish to discuss any of the points raised in this article, please contact the authors or your regular Reed Smith contact.

Client Alert 2026-179