Singapore's stablecoin plan: 100% reserves, no interest paid

Singapore has closed public feedback on a plan to license stablecoin issuers and make them hold full reserves. The Monetary Authority of Singapore set an October 16 deadline for comments on draft changes to the Payment Services Act. Issuers could not pay interest.

Those proposals sit in a consultation paper numbered P015-2026, which MAS published on September 1. The draft would turn a framework the regulator first settled in 2023, after a round of consultation that began in October 2022, into enforceable law. MAS said it will take a selective, risk-based approach, judging applicants on financial soundness, business viability and track record. It expects few to clear the bar.

What the draft rules require

A new license for stablecoin issuance sits at the center of the draft. Only firms that hold it could call their tokens MAS-regulated stablecoins. The core duty is plain. An issuer must hold reserve assets worth at least as much as every token in circulation, and must redeem those tokens at par in the currency they track.

Reserves would sit in segregated accounts on trust, held through approved custodians, with independent checks reported to MAS every month. The regulator also floated a floor for how much of those reserves must stay in cash or bank deposits, a range of 5 to 30 percent for coins that are not deemed systemic. Issuers would be barred from running other regulated businesses alongside the token, and would also need stress tests and wind-down plans. BTC Newz has explained how stablecoins stay pegged to the dollar, and why some fail.

Why issuers cannot pay interest

The ban on interest is the rule most likely to catch a saver's eye. An MAS-regulated stablecoin is meant to be a payment tool, not a savings product. Pay a yield on it and it starts to look like a bank deposit, which comes with insurance and far heavier rules. So the draft bars issuers from paying interest, a return, or any other benefit tied to holding the token.

Singapore is not alone here. The US GENIUS Act, signed in 2025, stops stablecoin issuers from paying yield. Europe's MiCA rules block issuers and service providers from granting interest. Hong Kong took the same line. Each regime worries about the same risk, money draining out of banks and into tokens that pay to hold them.

Bigger coins and foreign tokens face extra rules

Big stablecoins would face a second layer of control. MAS could label a token a designated systemic stablecoin by order in the Gazette. If that issuer then failed the rules, the draft lets MAS tell local exchanges to delist the coin and its trading pairs, and to stop users buying more. An issuer or an exchange may appeal to the Minister within 30 days. The designation stays in force while the appeal runs.

That reach crosses borders. The draft says the power applies whether a coin is issued inside Singapore or outside it. MAS also plans to recognize some foreign stablecoins from regimes it treats as comparable, so tokens licensed abroad could still circulate under set terms, much as the EU weighs its own tokens under the MiCA framework. Misuse of the label carries teeth. Falsely calling a token MAS-regulated could cost an individual up to S$125,000 or three years in prison, and a firm up to S$250,000, under the draft. A systemic issuer that lets its reserves fall short faces fines of up to S$250,000, plus S$25,000 for each day the breach runs on.

The draft also tries to head off confusion. For stablecoins that are not MAS-regulated, it would make licensed exchanges give retail users clearer disclosures and plain risk warnings, and would curb how those tokens are marketed. MAS wants a firm line between coins it oversees and everything else trading on Singapore venues.

What to watch

Next comes a quieter phase. MAS will weigh the feedback, then draft the detailed subsidiary legislation and consult on that too. The hard numbers live there. Redemption timeframes, stress-test thresholds and the exact terms for recognizing foreign coins all wait for that round.

Not a law yet. MAS has set no commencement date, and no issuer has been licensed under the new regime. The 2023 framework pointed to redemption within five business days, though that could change before anything binds. Watch the subsidiary legislation consultation. That is when a plan becomes rules.